Funding Data Confirms It: In-Store Tech Is Exploding As the Point of Sale Modernizes

By John Stewart
@DTPaymentNews

It’s no secret the U.S. point of sale is undergoing perhaps the most extensive overhaul in its long and storied history, but now there’s evidence that a crowd of technology startups are sharing in the bounty that sweeping modernization is generating.

Point-of-sale startups will likely reap $625 million in funding this year, setting a new record for financing in the category and topping 2015’s $612 million in total financing, according to numbers compiled by CBInsights, a New York City-based analytics firm that follows startup investment. Firms in the category sell everything from beacons for loyalty and payments to mobile apps to sensors that track foot traffic.

Clearly, the revolution going on at the point of sale isn’t limited to EMV. The biggest funding rounds so far in 2016 have gone to FiveStars, a loyalty-platform vendor that netted a $50 million Series C round, Euclid Analytics, which analyzes shoppers’ smart-phone signals ($20 million Series C), and AppCard, which personalizes receipts ($20 million Series B). All told, there have been 82 funding deals so far, nearly equaling the 96 seen in 2014 and again last year, according to the CBInsights data.

Funding for in-store tech startups has been steadily climbing. As recently as 2013, there were 81 deals for $309 million, but in 2014 total dollars increased to $476 million before soaring to $612 million last year. Deal activity was especially heavy in the second quarter this year, with a record 45 funding rounds, helping to drive total dollars invested to $326 million for the first half. The biggest deal in the quarter was a $19 million round for Index, whose technology is helping to deploy the speedier Quick Chip and M/Chip Fast EMV chip-reading programs from Visa Inc. and MasterCard Inc.

“We see a variety of focuses among the most well-funded in-store tech startups, including [Internet of Things] sensors, payment software platforms, and digital in-store marketing,” says CB Insights in its post on the data.

The most-funded startups overall so far are RetailNext (in-store analytics), $189 million; Revel Systems (mobile POS), $129 million; Lightspeed POS (POS systems), $126 million; ShopKeep POS (mobile POS), $97 million; and Altierre (digital labels), $91 million.