Today, I’m excited to share a significant milestone that will propel us further in our mission: a strategic majority growth investment from Battery Ventures, a leading technology-focused investment firm. This deal is both a recognition of what we achieved to date and a start of a new (and very exciting) phase for our business. 

We replaced an over-complicated cap table (with a multitude of investors and lenders) with a single partner that shares our vision and our excitement about leveraging technology to help retailers become more data-driven.  For the first time in years, we have access to large amounts of capital for investments that make strategic and financial sense and, very importantly, we have complete alignment around building a very profitable business.   

I thought this deal was a good opportunity for me to reflect on different phases of growing RetailNext, key learnings along the way, and to share why I am so optimistic about the next phase for our company. 

PHASE ONE: Learning And Falling In Love With Retail

While I had a relatively successful career in tech before starting RetailNext, including developing and launching software products at scale and managing global teams, I still managed to make almost every common entrepreneurial mistake: hiring the wrong people (getting seduced by high-profile execs wanting to join your team), wasting money on sales and marketing before having a repeatable and proven model, spending lots of time and energy on large partners before we were ready, expanding internationally too early, chasing the wrong KPIs (e.g. bookings, TCV), not investing enough in systems and financial infrastructure.   

There are plenty more, but these alone cost us tens of millions of dollars that we didn’t need to spend. That spending led to a need for more capital that, for a while, we were able to raise on increasingly large valuations from great investors.  As we raised more money, we fell into the trap of growth at all costs that was possible because of a great product that solved real problems, but was tied to the wrong business model and, without focus on profitability, resulted in a bloated organization with the wrong culture. 

The other part of the learning was about developing a deep understanding and love of retail.  One of the best things we did as an early-stage startup, was spend a lot of time learning about our target market.  While we were tech people from Silicon Valley and we were solving difficult technical problems, we started talking about ourselves as a retail company first and a technology company second.  I personally spent a ton of my time in stores and with retail operators understanding everything about their business.  That gave us credibility with our customers, that most tech companies lacked at the time.  It also allowed us to build a product that delivered real value and, for most of our customers, became indispensable to their day-to-day operations.   During that time, I also developed a deep conviction that physical retail is not going away and, for most categories, will only become more important over time.  That conviction allowed us to stay the course and not lose focus in a way that is really paying off today. 

PHASE TWO: Transitioning The Business

This phase was all about transitioning from a venture-backed business focused on growth funded by investors to a profitable business with real staying power.  To do that, we had to:  

1. Transition to a subscription business model in the market where it was not common at the time

2. Right-size and evolve the organization, while continuing to invest in R&D and innovation to cement our product leadership

3. Invest in infrastructure, automation, and processes required to truly scale as an operationally complex and global business

This kind of business transformation is never easy, but we were also hit with major unexpected challenges during that period, including COVID lockdowns that temporarily shut down most of retail, major supply chain disruptions that dramatically increased our working capital needs right as our cost of capital went up and war in Ukraine that forced us to relocate our team in Russia.  Thanks to the extreme hard work and dedication of our team, a close partnership with our customers, continued support from our investors and not an insignificant amount of pain, the business survived and came out much stronger.  

Path Forward

Today we are a profitable business that operates in over 100 countries and growing (we installed over 1,200 new stores per month in 2024) with a strong market leadership position, great product, and deep industry expertise.  We now have a great partner in Battery and a very strong financial position just as the new industry consensus is emerging around the criticality of physical retail and as advances in AI are opening new use cases for our unique data set. 

I couldn’t be more excited about the next few years for our business.  If you are someone interested in joining our global team, or a company that is interested in becoming a partner or a possible acquisition, please reach out.  And, of course, if you are a retailer that wants to improve your in-store experience and execution, we are here to help. 

To read the deal announcement, click here.