Trax focused on traditional listing in US market after raising $640m in pre-IPO round

From left: Joel Bar-El, executive chairman and co-founder of Trax; Justin Behar, CEO of Trax; and Dror Feldheim, president and co-founder of Trax

Singapore-based Trax, which offers image recognition solutions for the retail industry, has announced securing $640 million in a Series E round, as it carves out its growth expansion plans in markets such as Asia and Europe, Trax co-founder and executive chairman Joel Bar-El told DealStreetAsia.

So far, the company’s biggest market – the US – accounts for more than 50% of its revenue.

The current funding round, led by new investor SoftBank Vision Fund 2 and funds managed by return backer BlackRock, will be a combination of primary and secondary transactions. New investors namely OMERS, a Canadian pension fund, and Sony Innovation Fund by IGV, as well as existing backer Warburg Pincus have also participated.

Founded in 2010, Trax offers computer vision solutions for shelf monitoring, in-store execution, market measurement and analytics to retailers and consumer packaged goods (CPG) companies to better manage on-shelf availability and optimise merchandising. It operates in over 90 countries globally and counts brands such as Coca-Cola, Nestle, Unilever, P&G and Heineken among its clients.

Including the latest funding, the Singapore-headquartered company has raised $1.03 billion to date and is understood to be valued at over $2 billion.

The Series E round makes Vision Fund 2, the smaller successor to SoftBank’s $100-billion Vision Fund 1, the largest shareholder in Trax. The fund managed by SoftBank Investment Advisers displaces Warburg Pincus, which previously owned a 20% stake in the technology company.

“Through its innovative AI platform and image recognition technologies, we believe Trax is optimising retail stores by enabling CPG brands and retailers to execute better inventory strategies using data and analytics,” said Chris Lee, a director at SoftBank Investment Advisers. “We are excited to partner with the Trax team to help expand their product offerings and enter new markets.”

Trax declined to disclose its shareholding structure. Its other investors include Singapore sovereign wealth fund GIC Pte, Boyu Capital, Investec and Broad Peak Investment.

“The funds will be used to accelerate some of our innovations and developments that we have already started in previous years, especially around computer vision, machine learning, and marketplace technologies. We also want to expand our marketplace solutions, which include our dynamic merchandising solution, and connect shoppers in new geographies outside of the US, ” said Bar-El.

Trax’s last funding round in July 2019 saw it raising $100 million, with Chinese private equity firm HOPU Investment Management Company as the lead investor. It was valued at $1.4 billion after acquiring Paris-based AI-based in-store tech solutions firm Qopius and Boston-based retail analytics company Survey.com in 2020.

Focused on a traditional IPO

DealStreetAsia had last year reported that Trax was in early discussions to conduct an initial public offering (IPO) in the US.

Bar-El confirmed the company’s Series E financing is a pre-IPO funding round but declined to reveal further details about its IPO plans.

Asked if Trax is interested in the SPAC route to IPO, he said the company has been “fielding calls from SPACs on a daily basis” but does not think it is necessarily the best route for it.

“I would say that the suitability of a SPAC as a vehicle to become public really differs from company to company, depending on multiple factors. It also depends on the type of SPAC, the sponsor team, etc,” he said.

“We are not ruling out the possibility, but at the moment, we are quite focused on a traditional IPO like other companies were doing before the SPAC era,” he added.

Trax is seeking to list on Nasdaq or the New York Stock Exchange.

More M&As to fuel growth

Since 2019, the Singapore-based startup has acquired a total of five companies, namely China’s AI and big data analyst platform Lenztech, France’s Planorama and Qopius, and ShopKick and Survey.com in the US.

Bar-El said the company’s inorganic growth strategy has been particularly helpful in China, the largest and the most advanced retail market in the world.

“The Lenztech acquisition has proved to be very successful. We have over 50 corporate clients in China and our own research lab [in Beijing],” he added. “Revenue is growing steadily and at a very high growth rate. So far, we have been winning in the market against most of our notable competitors in the country.”

Trax is planning to introduce what it claims to be the first-of-its-kind AI-driven dynamic merchandising solution in China by next year. The solution, which leverages the technologies and know-how of Survey.com, helps brands and retailers keep shelves stocked and is currently only available in the US.

Meanwhile, US-based shopping rewards app ShopKick has seen “a tremendous uptake in terms of the number of shoppers engaged in the shopping journey.”

“The ROI presented in the solution for our clients is quite high, both in terms of the translation of those engagements into higher revenues, as well as the incrementality of continuous purchases after such engagements,” explained Bar-El.

The company continues to be on the lookout for attractive targets and could use part of the proceeds from the latest funding round for new acquisitions.

“We are looking for companies that can provide additional services in the operations, execution and analytics of physical stores. We are also looking for companies dealing with data analytics and shoppers. Engaging the shoppers will be a strategy for Trax in the years to come,” said Bar-El.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.