Consumer Data Company Retina Scores $2.5 million
Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
Retina, a Santa Monica startup that provides e-commerce companies like Dollar Shave Club and Madison Reed predictions of consumer behavior based on algorithms, announced on Wednesday that it has raised $2.5 million in funding led by Crosscut Ventures.
The backend platform helps business predict shopping habits by using what it says is "next-gen algorithms" and will use the funds to grow its reach and expand products. Since its inception, the company has pulled in $5 million in venture capital.
Data on shoppers and their long-term buying habits are especially vaunted in the e-commerce world where there's an intense fight for repeat customers as the retail industry sees radical change. Brick-and-mortar stores like Macy's, which announced on Tuesday it would close 125 stores in low-tier malls, are struggling to compete as shoppers migrate online.
Retina's founder Michael Greenberg also created fundraising tool ScaleFunder.
The changes in the retail industry nearly toppled Forever 21. The company, known for fast fashion, was pummeled by online rivals like Revolve and others. After filing for bankruptcy, the company this week entered a tentative $81 million deal to sell its assets to a consortium including mall owners.
But even as malls, the traditional hub for commerce, have emptied out, the high-price of acquiring and keeping customers online has been a challenge for retailers. Smaller companies that aren't as well funded are at a disadvantage when competing with giants like Amazon.
Retina hopes to fill in those gaps. It recently launched an app on Shopify, the e-commerce platform used by many online sellers. The three-year old company was founded by Michael Greenberg, who also created fundraising tool ScaleFunder.
"There's a cataclysm happening at the intersection of e-commerce and retail," Greenberg said. "Companies like mine are trying to help other businesses trying to compete with the sort of data science and technical prowess of Amazon."
Greenberg said customers are willing to provide companies data "if they get more personalized experience with less friction" in the transaction.
"Not all customers are created equal and, in fact, a majority of them are poison for the business," Greenberg said in an announcement. "Retina determines which customers will spend more as soon as they make their first purchase, not six months from now."
Crosscut Ventures managing partner Rick Smith said in a statement that technology's return on investment was "unmatched in the industry."
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Over the last three years, L.A. Lyft driver Nicole Moore has watched her paychecks shrink as her hours have grown. Frustrated, she's ready to leave her part-time gig, but until now there have been few options. That's about to change.
This year, two Texas-based companies are going after one of rideshare giants Uber and Lyft's biggest markets: Los Angeles.
Dallas-based Alto plans to begin their services by the end of October. And the Austin collective Arcade City will start marketing its ride-hailing app in Los Angeles Tuesday. They will be joining other apps already trying to steal away market share such as Wingz and Swoop.
Arcade City, Another Side Gig?<p>Part of David's pitch to would-be drivers is that current Uber and Lyft drivers can start building networks even before the co-ops are fully functioning. Half of Arcade's Austin drivers still work part-time for other ridesharing companies, and drivers are promised 1% from every credit card purchase their referrals make for three years.</p><p>"Our model is like beautifully parasitic on the other," he said.</p><p>While prices depend on the city and co-op rules, an Arcade City ride will typically run you a couple dollars more than one from Uber or Lyft. Riders can also pay by cash or barter with drivers for rides. In some cases, drivers let riders pay them back days later.</p><p>Arcade, which emerged in the heat of a battle between gig workers and the two ridesharing companies in Austin, has not been shy about taking a stance against his competitors.</p><p>In an open letter to Californians, Arcade's David <a href="https://arcade.city/dear-california" target="_blank">encouraged drivers</a> to vote no on Proposition 22 "because Uber and Lyft's years of mistreating drivers and bullying local governments should be punished, not rewarded."</p>
Alto's Ride Hailing Model<p>Alto is a membership-based service, although non-members can hail rides. Half of Alto employees come from Uber and Lyft, Coleman said, and each one is interviewed and background checked before being hired. He said the company "attracts the most professional drivers," meaning ones who consider Alto a job rather than a gig to make extra cash.</p><p>It's expensive to absorb the costs of hiring employees, Coleman told dot.LA, but if companies don't pay into unemployment and workers compensation, taxpayers will. Indeed <a href="https://laborcenter.berkeley.edu/press-release-what-would-uber-and-lyft-owe-to-the-state-unemployment-insurance-fund/" target="_blank">researchers at UC Berkeley found </a>that Uber and Lyft would have paid $413 million to California's Unemployment Insurance Fund had they classified their workers as employees.</p><p>The company offsets the cost by charging more. Coleman told the <a href="https://www.dallasnews.com/business/entrepreneurs/2020/01/31/dallas-based-ride-hailing-company-alto-raises-6-million-to-expand-in-dallas-start-driving-in-two-new-cities/" target="_blank">Dallas Morning News</a> earlier this year that Alto customers come from more affluent households with incomes of $100,000 or higher.</p><p>Alto has plans to begin operations in L.A. by late October, just around the corner from Election Day when voters will decide the fate of Prop 22.</p>
Luxury electric car company Karma is in talks with investment banks to help it go public, company officials told dot.LA.
Karma is hoping to ride the Tesla wave of success and capitalize on the soaring valuations of its competitors.
"We want to take advantage of the fact that the market is red hot right now, so we want to be fast," said Mikael Elley, chief of staff at Karma Automotive.
Courtesy of Karma
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