Computer vision start-up Tiliter has raised $7.5 million in a round led by Investec, as more supermarkets embrace its technology that enables customers to check out without needing to scan items.
Tiliter, which was founded by Marcel Herz, Martin Karafilis and Chris Sampson in 2017, has created a hardware and software system that automatically identifies items, such as fresh produce, without the need for barcodes, packaging and price stickers, making it easier for shoppers to self-checkout.
Tiliter co-founders, from left, Marcel Herz, Martin Karafilis and Christopher Sampson already have their technology in 20 Woolworths stores.
Speaking to The Australian Financial Review, Mr Karafilis said the business was designed to make the supermarket shopping experience quicker and easier for consumers, while helping the supermarkets reduce deliberate and accidental theft.
"[The self-checkout] process is slow and time-consuming and we've gone through the phase of online shopping, so we know buying fresh produce online isn't ideal," he said.
"We knew there was a way we could fix this."
In a store with between 60 and 120 categories of produce, Tiliter says its technology has 99 per cent accuracy.
Its checkout tech is already deployed in 20 Woolworths stores throughout Australia, in Countdown supermarkets in New Zealand and in several retail chains in the US, including New York's Westside Market.
Mr Karafilis grew up with his co-founder Mr Sampson in the regional NSW town of Scone and they jokingly consider their old band to be their first start-up.
The pair got to know Mr Herz, and when Mr Sampson undertook a masters at the University of NSW the trio decided they wanted to start their own business in the growing field of computer vision.
As well as Investec, which invested $3.5 million through its Emerging Companies Fund, its latest funding round was supported by local angel investor syndicate Eleanor Venture, US-based AngelList and New York's Cornell University.
Investec's emerging companies head, Karen Chan, said the co-founders had impressed her as "young and resourceful" and also focused on execution.
"They presented at the Tech23 conference and that was the first time we'd come across them," she said.
"It's hard to sell into the big supermarket chains, which have long and slow sales cycles, but they demonstrated their ability to close on those deals.
"We also love backing founders who have homegrown tech and have taken it overseas."
Global growth during COVID-19
Within the next 12 months, Tiliter hopes to have its technology in use in more than 1000 supermarkets, particularly targeting the US.
In the past year it has seen a 300 per cent increase in "scan-and-go" technology use in the US, largely fuelled by COVID-19 and the shift to contactless technology.
"It's made retailers globally push for innovation ... especially when it comes to cashier-less technology. [They've had to look at] how they implement measures that abide by the latest legislation, as well as health and safety [standards]," Mr Karafilis said.
"The technology is also being used in warehouses ... to fulfil online orders. So while we're seeing a pick-up in online orders, we're also helping fuel the checkout."
The company is also increasing its presence in Europe.
While it is yet to announce any deals there, all three co-founders moved to Munich in 2019 and set up Tiliter's European office.
Its manufacturing is split 50/50 between Germany and Australia, and Mr Karafilis said the company had already been using R&D tax incentives. He said the recent changes to the scheme, in addition to the $1.5 billion of advanced manufacturing initiatives in the federal budget, would benefit the company.