More and more retailers are learning the importance of big data and how it can be applied to improve sales, but few have the core expertise to understand how to gather, organize, and to analyze it. To help them do so, Toronto-based startup Rubikloud has raised $7 million in Series A funding from strategic investors.
Rubikloud was founded with the idea that it could help online retailers use big data to boost their sales. By understanding consumer behavior and applying data analytics on the fly, the company believed it could improve conversion rates by making changes in real-time during the checkout process.
But over time, the company learned that the same type of data analysis it was producing for online retailers could also be applied to businesses that had brick-and-mortar stores as well. In fact, since 80 percent of sales for omnichannel retailers happen in the offline world, understanding how customers shopped in real-life was potentially more lucrative than converting them online.
The data those retailers produce is messy and difficult to wrangle — it’s usually stored in multiple different systems with little way to get a cross-platform view of what’s actually driving sales and which customers are buying what.
Rubikloud provides a way for retailers to consolidate, normalize and analyze the data they are producing without having to build data solutions themselves or hire expensive industry consultants. They simply connect their data stores to Rubikloud’s system, and it does all the work, providing a simplified view of their performance while also pushing actionable insights to them directly.
It’s an idea that’s caught on with early clients as the company has signed up a group of retailers focused primarily in the fashion, health and beauty verticals. Those customers generate about $25 billion in sales each year, but Rubikloud thinks it can increase that number.
According to Kerry Liu, the company has focused on certain verticals in part because many of those retailers already have a large amount of data about their sales and rewards customers — they just need a little help understanding how to apply that data. Once they have that, they can increase their overall sales by identifying and engaging with their most valuable customers.
It’s a big idea focused on a big market, and so it’s no surprise that the company was able to raise an additional $7 million in funding. But the more interesting part might be where that money came from, as it’s from the kind of strategic investors that best know how transformative of an idea this could be.
Rubikloud’s seed round was led by Horizon Ventures, the investment arm of Li Ka-Shing. As it raised its Series A, the company found interest from a few companies related to Li’s retail empire — most notably TOM Group, a joint venture between Li’s Cheung Kong Holdings and Hutchison Whampoa, and Ule, the Chinese e-commerce platform launched by TOM Group and China Post. Access Industries also participated, along with some other angels.
With the strategic investment it’s clear not only that Rubikloud will get some help as it seeks new clients, but that the company will be focusing on tailoring its product for Chinese customers. According to Liu, those investors have more than $60 billion in retail sales either managed directly or through joint ventures, so it has a big opportunity in front of it.
“This is a race to see who can get the most data from the most relevant retailers,” Liu said. “It’s a race to see who will be the data consolidation and model framework for retail.”
To try to win that race, Rubikloud will be increasing its headcount. Liu says it will likely increase from 13 full-time employees today to between 25 and 30 by year’s end. It plans to increase its data science team while also expanding more in North America and China.