Running out of inventory not only means you are missing out on sales of popular items, but you may also have to wait awhile to get those items back in stock.
New York-based Toolio has built cloud-based merchandising and inventory planning software to enable retailers to optimize their merchandise planning and make better and faster decisions on what products to have and when to have them.
On Thursday, the company announced an $8 million round of Series A capital. Jump Capital led the round and was joined by Rho Capital’s Ignition Fund and existing investors like Founder Collective, Notation Capital and Max Ventures. The latest funding gives Toolio a total of $10.3 million raised since the company was founded in 2019.
Toolio was co-founded by ex-Walmart employees Eytan Daniyalzade and Berk Atikoglu, who previously built the fashion app Stylr and sold it to Walmart in 2014 after growing to hundreds of thousands of users. While at Walmart, they recognized inefficiencies with supply chain and merchandising in which products were to be sold and in which stores.
“Even at a company of that scale, the process was spreadsheet driven,” CEO Daniyalzade told TechCrunch. “They wanted to make it data-driven and were investing in resources internally. We realized there was a gap and left Walmart in 2019 to democratize the next planning platform.”
The planning software integrates with the commerce tech stack and automates workflows to provide forecasting analytics that customers can use to respond to demand in real time so they decrease the amount of stockouts, improve margins and have faster inventory turns.
Toolio initially started on the enterprise side, but last year saw a need in the mid-market for cloud tools. As a result, the company grew 20% month over month in revenue and similarly in customer growth. It is already working with retailers like Chubbies, Mack Weldon and Rothy’s, and has managed over $1 billion in inventory for retailers.
The Series A will enable the company to scale into other retailer vertices, expand the team and add new product modules like supply chain and materials resource planning.
Yelena Shkolnik, partner at Jump Capital, said she learned about Toolio from retail advisors who mentioned that the company was solving many of the pain points around inventory, including how to purchase the right items.
Just as the supply chain side was getting more analytical and sophisticated, the global pandemic disrupted everything and gave retailers an insight into just how connected to China they really were, Shkolnik said.
In trying to solve how to prioritize inventory creatively, Toolio stood out.
“They were in the space before with Stylr and understand the approach,” she added. “Inventory was the one piece of the retail stack that wasn’t elevated to the cloud, and Toolio has made it possible for everything now to be on the cloud.”
Meanwhile, Daniyalzade says much has happened in retail over the past 15 years, especially on the front end from companies like Shopify, but the back end has not yet caught up because it is not one of the more “sexier” aspects of retail and previous solutions fell flat.
With everyone establishing direct-to-commerce channels, even manufacturers, demand for planning has become “everyone’s problem and is a total addressable market that Toolio can tap into,” he added.