Valued at $535 million, autonomous retail startup Standard Cognition has emerged
as a soon-to-be tech giant and the best hope for merchants to compete withAmazon
[https://crunchbase.com/organization/amazon]Go. Cashierless checkout is poised
to transform brick-and-mortar commerce, and shop owners fear having to battle
Amazon?s technology alone or partner with it, exposing data it could use against
The $86 million-fundedStandard Cognition [https://standard.ai/]is racing to
equip storefronts with an independent alternative using cameras to track what
customers grab and charge them. But Amazon?s early start in the space poses a
risk that it could patent troll the startup. So today, Standard Cognition
announced it has acquiredDeepMagic [https://www.deepmagic.cc/], a pioneer in
autonomous retail kiosks.
?We?re not an aggressive company by any means. My personal stance on patents is
that maybe they?re not the way the world should work,? says Standard Cognition
CEO Jordan Fisher. ?But given the larger player in the space, I think it?s the
right thing to do so we have coverage and can protect ourselves.?
DeepMagic [https://crunchbase.com/organization/deepmagic]lets customers swipe a
payment card when entering a smaller kiosk or store, pick up items that are
detected by cameras and simply walk out while having their card charged. The
idea is that businesses could operate satellite micro-storefronts in malls,
apartment buildings and more without staff. DeepMagic was easier to deploy since
the kiosks were built from the ground up to eliminate annoying checkout lines.
Standard Cognition CEO and co-founder Jordan Fisher
Standard Cognition, meanwhile, focuses on retrofitting full-sized grocers and
other stores, like the one in minor league baseball?s The Worcester Red Sox?s
upcoming stadium, as well as others it hasn?t announced. It currently has one
experimental shop of its own in San Francisco. Rollouts with partners are more
challenging because the startup doesn?t design the building form factor or
inventory, but is addressing a much bigger market of existing storefronts. It
claims it can grow profit margins for shops by up to 100%.
Standard Cognition sees the smaller footprint spots outfitted by DeepMagic as a
crucial piece of the autonomous retail landscape. So it?s acquiring DeepMagic?s
technology, and bringing on co-founder and CEO Bernd Schoner as a consultant.
Standard Cognition won?t pick up DeepMagic?s staffers or pilot contracts, but
it?s considering how to integrate the technology as it ramps up its own
deployments. ?We were both tackling this problem with a strong focus on the
power of computer vision, so it made sense to align ourselves with?Standard,?
Schoner tells TechCrunch. ?We think?Standard?is in the best position to win this
DeepMagic was mostly founder-funded, but the five-employee company had raised
$150,000 from angel investors since starting in New York in 2017. Yet Standard
Cognition, which was founded a few months later, raised a$35 million Series B
[https://techcrunch.com/2019/07/25/standard-cognition-lands-35m-at-535m-valuation-to-battle-amazon-go/] in July from EQT Ventures and Initialized. It has become a center of gravity in
cashierless tech, having pulled inhalf the total $118 million invested
[https://www.bloomberg.com/news/articles/2019-01-22/amazon-go-one-year-old-has-attracted-a-host-of-cashierless-imitators] in the space in 2018. Now it?s consolidating the space with the DeepMagic buy
and itsacquisition of retail mapping startup Explorer.ai
The purpose of the buying spree is getting to market first. ?Every day, the
thing is speed. I think this is going to be a very fast market. Every day
counts.?One of my biggest jobs is to keep everybody as motivated today as they
will be in five years,? says Fisher. ?Six months today will translate to 20%
market share in five years. That?s crazy and it?s a huge motivating factor.
Moving fast enough that we can get the lion?s share of the market is what keeps
me up at night.?
The company also has to outpace fellow startups like direct competitorsZippin,
[https://crunchbase.com/organization/zippin]Trigo and Grabango. Along the way,
Standard Cognition has been focused on developing unbiased anti-theft technology
that doesn?t care what a person looks like, just what items disappear from
shelves. Fisher says it?s also looking into how it can make sure it doesn?t
unabashedly grow unemployment. ?We?re creating more jobs than we?re displacing
right now,? Fisher claims, saying it needs people for data labeling to train its
Standard Cognition?s co-founder and CEO hopes Amazon will find it just as
challenging if it tries to move from running its own 18 or so Go stores to
equipping other businesses. The startup also hopes to capitalize on fears about
how Amazon might use partners? data the way it does in e-commerce. ?I don?t
think that?s minor at all. Do they get the insights? Can they leverage that to
have a better offering on Amazon.com and in their brick-and-mortar stores?,?
Fisher asks. ?Our product offering has none of those strings attached. There?s
no ulterior motives.?
Original Article: https://techcrunch.com/2019/10/10/autonomous-retail/