Shelfie Robot

An automated, intelligent robot for supermarkets, with the ability to analyse shelving stock gaps and report real time data

Internet business IT and Telco Retail
SUCCESSFULLY FUNDED!
$580,541
invested
109%
funded
0 hours
time left
8.3% - 26.5%
minimum-maximum equity offered
$532,499 - 
The minimum combined investment required for this deal to become successfully funded.
$2,129,998
The maximum combined investment this deal is capped at.
investment sought (min - max)
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More detailed information about this offer is contained in this Information Memorandum DOWNLOAD IM

OFFER OVERVIEW

The Company is offering a minimum of 111,111 ordinary shares under the following terms:

 

 

EXECUTIVE SUMMARY

The Shelfie Robot is an automated, intelligent robot with the ability to monitor stock levels in supermarkets to deliver real-time data for managers to make better quality shelf-stocking decisions.

The Shelfie robot combines intelligent image capturing and cloud-based data analytics solutions, and automatically travels throughout stores scanning shelves and reporting on stock gaps in real-time.

The A$500,000 (NZ$532,500) allocation available on the Equitise platform is part of a wider A$2,000,000 (NZ$2,129,998) capital raise. The non-Equitise portion of this capital raise (A$1,500,00) has already been filled by angel investors outside of the Equitise platform.

The Shelfie Robot is an innovation that intends to revolutionise supermarkets’ ability to understand stock issues both in Australian, New Zealand and overseas retailers. Shelfie trials are planned for this quarter in countries including Australia, France and the US.

The technology is being applied in many different ways and has also been considered for use in the fashion retail industry, taking pictures to ensure merchandise is displayed in the right way. Large cosmetic companies have shown significant interest in using the Shelfie Robot to help audit the way their stock is presented in stores.

The Shelfie Robots have a round base and a 1.8-metre pole fitted with cameras, along with a fixed shelf eye element that involves a network of in-store cameras looking directly at stock and shelves. The cameras are only active at set times and shoppers caught in the images are blurred out.

 

 

In a store the Shelfie Robot maps its layout, scans shelves, identifies stock levels, captures pricing information from shelf labels and its automatic shelf scanning means it can alert staff when a product is almost sold out. In a normal-sized supermarket a full inventory check takes Shelfie three hours to complete.

KEY STATISTICS

Shelfie Robot was established in October 2016 and in a short amount of time has been able to achieve significant milestones:

  • Shelfie was invited by Microsoft to exhibit on Microsoft’s stand at the World’s No.1 retail show in New York (the NRF Big Show in early January 2017).
  • Follow up meetings after the NRF Big Show were conducted with large retailers including Tesco, Sainsbury’s, Waitrose/ John Lewis, Auchen and more.
  • Shelfie was invited by Microsoft Germany to exhibit in their stand at Euroshop. Four key opportunities (The Home Depot, OBI, Tesco and Lidl) progressed to Pilot phase following dedicated meetings at EuroShop.

NOTE: For a more comprehensive list of Pilots in Progress, please see the Information Memorandum in the ‘Documents’ section of this offer.

BUSINESS MODEL

Pilot programs:

Shelfie Robot is in the process of conducting 4-week Pilot Programs which cost retailers A$18,000 per subscription. Pilot Programs include the following services:

  • Installation and setup of a varying number of devices (5-10 fixed locations devices)
  • Up to 100,000 image scans
  • Project management
  • Dedicated Shelfie relationship manager
  • Reports and Results Summary

Large scale rollout:

Shelfie is sold as a robot and fixed cameras. The robot incurs the most expensive up-front cost at $25,000 per device, with the fixed cameras costing retailers $150 per device. After this, the cost is based on how often Shelfie is used and the number of shelf units.

NOTE: For more information on the Shelfie business model, please see the Information Memorandum and financial model in the ‘Documents’ section of this offer.

 

MILESTONES & HISTORY

The robot was designed in Manly (Sydney) and incubated by Lakeba.

Lakeba is an incubator which has a history in the commercialisation of new innovative concepts. Lakeba employ 70 people worldwide, providing a dynamic collection of experience, technology, and development capabilities. Lakeba has experienced success through its involvement in the commercialisation of Quixxi, ezidox and 360dgrees, a video production company.

The Shelfie Robot product was unveiled at the US National Retail Federation’s Big Show in New York City in January 2017.

The new robot launched at the National Retail Federation BIG Show was developed following a discussion with one of Australia's major supermarkets about the challenges it was facing with stock takes and inventory management.

The robotic technology is used in conjunction with image capturing and data analytics and runs on the Microsoft Azure cloud to provide real-time inventory management via a dashboard that provides insights into sales trends and how to optimise merchandise layouts.

 

STRATEGY & VISION

The initial focus for the device will be the retail grocery sector, a pilot with UK-based supermarket chain Co-Op is currently underway, and commercial availability of the Shelfie is slated for the end of the year in the UK.

The device’s strength is quickly identifying and rectifying merchandise gaps, thereby minimising lost sales opportunities. For example, once a gap or discrepancy is located, an alert is sent out to ensure it is quickly fixed so that the sales opportunity is not missed. Shelfie streamlines reporting around sales trends, providing retailers with intelligent insights and enabling localised special offers.

The company is also working on upgrades to the Shelfie technology which would allow the system to also restock shelves.

 

 

Partnership with Microsoft:

  • Microsoft has provided its Azure cloud platform to house the data analytics, with other services such as Active Directory, SQL and Content Delivery Network helping to facilitate data capture
  • Marcy Larsen (retail lead at Microsoft Australia) has publicly stated that the solution on Azure allows Shelfie to scale rapidly and be made available internationally
  • In the future Shelfie will be integrated with Microsoft Dynamics 365 to automate stock ordering
  • Azure’s rich range of machine learning and cognitive services will allow Lakeba to create solutions that should be transformational and disruptive to clunky and expensive manual processes in the retail industry

 

USE OF FUNDS

The disbursement of funds from this capital raise will be allocated to three core areas being development of the product and enhancement of the IP behind the business, sales and marketing to continue to continue rolling out trials with global leading retail outlets and general operational expenditure. 

 

FINANCIAL SUMMARY

Profit and loss

The following financials are presented on a consolidated basis (July 2016 - March 2017):

NOTE: For more information on forecasted revenues, please see the Information Memorandum in the ‘Documents’ section of the offer.

 

Balance sheet

 NOTE: Commercial terms around the inter-company load are 0% interest, payable when its possible.

HOW WILL MY SHARES BE HELD

Your shares will be held on trust by a nominee company. This allows the company and the nominee directors to help manage communications between investors and Shelfie, and Shelfie will only have one name on its share register.

Should there be a shareholder vote, such as on the future sale of the company, change in constitution or other shareholder resolution, the nominee will pass any required resolution to you, the investor to vote on. The nominee will then collate these votes and pass them up to Shelfie. Where the corporate action (for example a shareholder resolution) requires the nominee to vote shares held as a single bloc, the nominee may vote the shares in accordance with a majority view expressed by those investors giving timely instructions.

Upon any liquidity event, where your shares are sold as a result of a trade sale or IPO, any funds available to you as a shareholder will flow through the Equitise trust account to you, the investor. In the event of an IPO, where your shares are not sold but become traded on a public stock exchange, you will hold your shares directly in the company rather than through the nominee company.

As a result of offering this service, and through managing the nominee company, Equitise takes a 5% success fee of your profits on any future liquidity event. This percentage will only be deducted from the returns we hope investors will make.

We are happy to answer any questions about the nominee via email to contact@equitise.com.

 

SKY BUSINESS NEWS INTERVIEW

FINANCIAL MARKETS CONDUCT REGULATIONS - WARNING STATEMENT ABOUT EQUITY CROWDFUNDING
  • Equity crowdfunding is risky.
  • Issuers using Equitise’s facility include new or rapidly growing ventures. Investment in these types of businesses is very speculative and carries high risks.
  • You may lose your entire investment, and must be in a position to bear this risk without undue hardship.
  • New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.
  • The usual rules do not apply to offers by issuers using Equitise’s facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
  • Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

MARKET OVERVIEW

A 2016 study from IHL Group found that retailers globally lost US$1.75 trillion annually from stocking mistakes and needless returns. Other studies from IHL Group suggested global retailers forego US$1.1 trillion of revenues each year because they run out of stock of popular items, or are overstocked with unwanted product.

As per IHL’s research, the worldwide losses in these categories are primarily in out-of-stocks and overstocks.

The Shelfie Robot is well positioned to take advantage of this opportunity for retailers and is entering several different retail industries, including grocery, fashion and cosmetics.

Based on another IHL study, it is estimated that US$366 billion of this loss is addressable with a technology, business process or training solution. Of that amount, nearly US$200 billion is caused by internal process or training issues that lead to merchandise either not making it to the shelves in time or the company having too much of what they cannot sell without pricing for clearance.

Additional key findings include:

  • Out-of-Stocks make up 56% of the US$818 billion figure, or US$456.3 billion
  • Overstocks account for the remaining 44%, or US$362.1 billion
  • Worldwide nearly US$1.5 Trillion of merchandise annually is in an overstock position that creates a loss in revenue
  • The Asia Pacific region contributes 40% of all inventory distortion, or US$327.5 billion, increasing almost US$24 billion in one year
  • The Asia Pacific region is home to the most severe inventory distortion problem. The food/grocery and hypermarket segments are responsible for 63.7% of the inventory distortion in the region
  • While North America is the most technically mature region, 54% of their contribution to inventory distortion is due to out-of-stocks

 

TARGET MARKET

Beyond optimising existing revenue chains, the Shelfie Robot has the potential to deliver cost savings of up to $300,000 per store per year – for a grocery retailer operating hundreds of stores it can quickly equate to a sizeable saving, freeing up employee time and resource to be invested in other operational areas.

In the future, its use will also be broadened out from the grocery sector to include other retailers such as department stores and other industries such as hospitality.

While Australian supermarkets are behind their global counterparts in the innovation game, Mr Younger said a cultural shift was under way and this would change in the next 12 to 24 months. In that period we will see so much change with companies like Amazon coming to Australia, and some of the big retailers will start going out of business.

Shelfie Robot is already in talks to roll out more than 2,300 robots in the UK, and has plans for the US market.

COMPETITIVE LANDSCAPE

Tally

Tally is operating in a similar space to Shelfie and was also unveiled at the US National Retail Federation’s Big Show in New York City in January of 2017. 

What differentiates Shelfie from Intel’s offering is its multiple form factors. Shelfie is available as a floor-standing robot, drone or hand-held device, giving retailers greater flexibility with the deployment of the robots.

Simbe, Trax and Bossanova

All these competitors use a different algorithm approach which uses product recognition as the key identifier. The robots that they produce have a lot more technology built into the hardware stack, making them much more expensive and complex.

The Shelfie platform is built on a unique approach which compares an “ideal shelf” with the current shelf. This image analysis allows for extremely light hardware and a much more diverse business application.

POTENTIAL RETURNS

The directors of Shelfie believe there are at least three potential liquidity possibilities for shareholders who invest through this offer:

Trade sale of the technology platform to:

Trade sale is a realistic option as there are many big players in the retail industry that like to own these types of technologies that improve employee efficiency and increase sales.

Exchange Listing:

A listing on the ASX would require successful execution of our growth strategies over the next 3 – 5 years. Exchange listings can be structured to allow existing shareholders to sell some or all of their shares at the time of the listing and generally creates greater liquidity for shares once listed.

Shareholder Marketplace:

Shareholders can sell their shares by private agreement. Management and Board are fully supportive of shareholders wishing to buy or sell and will assist wherever possible.

FINANCIAL MARKETS CONDUCT REGULATIONS - WARNING STATEMENT ABOUT EQUITY CROWDFUNDING
  • Equity crowdfunding is risky.
  • Issuers using Equitise’s facility include new or rapidly growing ventures. Investment in these types of businesses is very speculative and carries high risks.
  • You may lose your entire investment, and must be in a position to bear this risk without undue hardship.
  • New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.
  • The usual rules do not apply to offers by issuers using Equitise’s facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
  • Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

THE TEAM

The core team for this business is listed below. To view the specific profiles of these team members please select “see profile” where you can view a complete biography of the person, including links to their social profiles. You can also view the advisory/board members and current shareholders of the business to give you a thorough understanding of the human capital associated with this investment opportunity.

INVESTORS

Below is a list of the investors that have committed their funds in this round of capital through the Equitise platform. Some of our users like to remain anonymous with their investments. In which case we allow the users to obfuscate their details when investing.

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frazer hanning Last Investment made: 30-04-2017
Investor Last Investment made: 30-04-2017
Chris Last Investment made: 30-04-2017
Joshua Cristall Last Investment made: 29-04-2017
Rupert Oakley Last Investment made: 29-04-2017
Henry Morris Last Investment made: 29-04-2017
C.Y Last Investment made: 28-04-2017
Adam Nock Last Investment made: 28-04-2017
Andreas W. Last Investment made: 28-04-2017
Marris Weight Last Investment made: 27-04-2017
David Flacks Last Investment made: 27-04-2017
Yogesh Narula Last Investment made: 27-04-2017