Israeli-founded Trax completes $640 million series E

Retail analytics company Trax Image Recognition announced Wednesday that it has secured $640 million in a Series E financing round led by SoftBank Vision Fund 2 and technology-focused funds managed by existing investor BlackRock, Inc. This round of primary and secondary capital also saw participation from new investors including OMERS, one of Canada’s largest defined benefit pension plans, and Sony Innovation Fund by IGV.

The company didn’t specify the division between the primary and secondary investments, but according to Calcalist estimates, the volume of the purchase of secondary shares stands at roughly $300 million, mostly from early investors who desired to actualize a portion of their shares while retaining others ahead of a planned 2021 IPO. Trax had raised a total of $360 million in previous funding rounds. According to Calcalist's estimates, the round was conducted at a valuation of $2.25 billion.

“We spoke with many organizations around the world who invest in various stages and who see us as a growing company with the potential to be publicly traded in the future. Softbank invests in many high-growth tech companies and at the end of the day is the largest tech investor in the world. Our connection to them will impact our success going forward,” Joel Bar-El, Trax’s executive chairman and co-founder, said in an interview with Calcalist. “I think that Softbank provides us with a strategic component that no one else can. These sums can create a market and cause disruption that VC funds just aren’t able to. Their aggression, if channeled correctly, can really help growth companies.”

Bar-El, who stepped down from his role as CEO over the course of the past year, noted that despite the large investment, Softbank has not taken over the company, but instead has become the primary backer alongside BlackRock. “The investment doesn’t mean they are acquiring the company. Softbank may be the largest backer, but it is not even close to acquiring the company. Maintaining our growth will enable us to make market moves that we couldn’t have done otherwise as well as the clout needed to choose the timing of acquisitions and go public from a position of strength,” he said.

Trax’s cloud platform is accelerating the digital transformation of consumer packaged goods (CPG) companies and grocery retailers by providing granular visibility of rapidly changing store conditions. Trax solutions enable users to make timely, data-driven decisions and implement immediate corrective actions. As a result, brands and retailers are accelerating growth, reducing costs, and driving awareness and purchase intent.

Since its founding in 2010, Trax has pioneered a host of technological advances for the industry. In the past year, Trax has launched a suite of autonomous shelf monitoring solutions and an AI-driven, enterprise-level dynamic merchandising service to help brands and retailers keep products on shelves with the assistance of Trax Flexforce, an on-demand crowd marketplace.

“Despite the turbulence of 2020, we made tremendous strides in our business because of the hard work, dedication and team spirit at Trax. Our many solutions address the complex needs of CPG brands and retailers as they rapidly adjust to shifts in consumer behavior. This funding puts Trax confidently at the forefront of the future of retail, where the physical and digital combine in new ways to bring meaningful experiences to shoppers,” Bar-El added. “Our many solutions address the complex needs of CPG brands and retailers as they rapidly adjust to shifts in consumer behavior. This funding puts Trax confidently at the forefront of the future of retail, where the physical and digital combine in new ways to bring meaningful experiences to shoppers.”

“Through its innovative AI platform and image recognition technologies, we believe Trax is optimizing retail stores by enabling CPG brands and retailers to execute better inventory strategies using data and analytics,” said Chris Lee, 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 has been building its sophisticated, AI-powered, retail cloud platform for more than a decade,” said Trax’s CEO Justin Behar. “We began our journey by creating novel computer vision solutions for retail and have since broadened our capabilities to serve the evolving needs of the modern retail ecosystem. Through this significant investment from SoftBank, BlackRock and others, we will invest in our team, extend our market leadership, continue to scale our retailer business, and drive the next stages of long-term growth and innovation.”

Founded by Bar-El and CCO Dror Feldheim, Trax is active in more than 90 countries with its main offices located in Israel, the U.S., and Singapore.