While Square Inc. is suffering losses and looking for a possible acquirer, venture investors are plowing more money into companies that offer point-of-sales (POS) and payment technology.
ShopKeep.com Inc. in New York has raised a fresh, $25 million in venture funding, says founder and Chief Executive Jason Richelson, to help independent merchants ditch their old-school cash registers and deliver an in-store experience that customers might expect from an Apple store.
A Principal Analyst with the eBusiness Group at Forrester Research, Adam Silverman, noted that large, deep pocketed retailers have started to change shoppers’ expectations.
About 79% of major U.S. retailers plan to offer roving, mobile cash registers – or to use a term of the trade “mobile POS” – by 2015, he said. And no matter what the size of the merchant, shoppers want to be able to pay without waiting in line, order online and pick up in stores, or find out if an item is in-stock, instantly, without sending a worker to search in the back room, he noted.
Even smaller stores will need to invest in software and POS systems to enable this level of customer service, ShopKeep’s CEO believes.
The ShopKeepPOS – a combination of hardware and cloud-based software – is used by more than 10,000 storefronts in the U.S. today. The company manages more than $1.8 billion in payment processing annually, Mr. Richelson said.
ShopKeep delivers its system in one box. It includes a cash drawer, a secure credit card reader (or “swiper”), an iPad and a stand and costs about $1,200 for one location with a single-register set up.
ShopKeep’s customers range from boutiques, shoe stores, and gift shops, to food and wine purveyors and “quick-service” restaurants like coffee shops, bakeries or other establishments where customers order at the counter.
Once a merchant himself, Mr. Richelson created ShopKeep when he grew frustrated trying to use technology built for large enterprises to run his small wine shop, the Greene Grape in Brooklyn.
While the shop is still in business, Mr. Richelson has shifted his attention to growing ShopKeep, a company with over 100 employees in New York and Belfast, Ireland today.
ShopKeep plans to use its new funding for hiring, to set up new offices in the U.S., and to roll out its new, mobile phone-based system allowing staff at independent stores to roam the aisles, helping customers check out on the spot.
While competitors are abundant in the field – including PayPal, Intuit and Square – the CEO believes ShopKeep is unique in its knowledge of, and focus on the needs of small to medium sized merchants.
ShopKeep provides “hand-holding” and customer service by phone. If a sales associate has trouble printing a receipt, or needs help processing a return they can get help from ShopKeep, the CEO said.
The system also does more than take cash and card payments—ShopKeepPOS helps retailers run the store, end-to-end. For example, it lets merchants see who is on the clock, send employees home if the store is over-staffed, understand inventory costs, manage receiving history, track customer visits, and more.
Thayer Street Partners led the Series C investment in ShopKeep joined by the startup’s earlier backers: Canaan Partners, Tribeca Venture Partners, TTV Capital and Contour Venture Partners and individual angel investors.
Thayer Street founder Josh Koplewicz said ShopKeep’s highly favorable customer reviews, traction with small and medium retailers to-date, and focus on the specific market of small-to-medium sized merchant helped convince him to invest.
He said there are up to 20 million small-to-medium sized merchants in the U.S. alone who aren’t yet using a contemporary cash register, or sophisticated POS systems.