Nexite wants to provide mall stores with Ali Express-level data Most people still shop at brick-and-mortar stores. Nexite’s smart tags help fashion retailers know what’s in stock, which items customers look at, and what gets left behind. Ofir Dor Although online commerce has gained tremendous momentum during Covid-19, according to forecasts, in 2024, humanity will still make only about 22% of its purchases online. Start-up Nexite, founded in late 2017, tries to provide brick-and-mortar fashion stores with some e-commerce site functionality, and to mitigate the disadvantages they suffer in terms of data and level of service.
Behind the start-up are Anat and Lior Shakedd, a married couple and parents of five children (two born since Nexite started). Lior (CTO) is a graduate of the elite IDF technology training program Talpiot and a former Intel engineer, while Anat (CEO) worked for years as a brand manager at supermarket chain Shufersal and a category manager at food company Tnuva. In those positions, she experienced firsthand the lack of available data. "Other than how much was sold, I knew nothing about the products. Decisions on in-store placement, for example, were made based on gut feelings, or at best, based on market surveys," she says.
Bluetooth-based tags
Nexite aims to provide shop owners with data through tags sewn into clothing during the manufacturing process. The tags provide instant data on what is in stock and where. They can also provide business insights as to those areas of the store that attract the most customers, and those that nobody visits. Finally, the tags are designed to replace the hard security tags attached to clothing, and allow customers to purchase and even return products in an expedited scanning procedure, without having to stand in line or deal with the sales assistant.
Existing camera-based solutions used in places like supermarkets are unsuited to the fashion world, where products are too similar; the camera cannot distinguish, for instance, between two black shirts with different price points. The fashion sector has relied on RFID tags, which transmit data via radio frequency to readers distributed throughout the warehouse or store. RFID tags are cheap, about 10 cents per tag, but their main disadvantage is their fairly short range, which makes it difficult to read from a distance of more than half a meter, and requires placing many expensive readers in the store.
Nexite is developing tags based on the Bluetooth standard, similar to the AirTag tracking device launched by Apple this year. They are more expensive, but allow data to be received from a much longer range of up to 5-10 meters. Unlike Apple's AirTag, the Nexite tag is battery-free and charges via electromagnetic induction from devices in the environment. At the heart of the Bluetooth tag is a chip designed by Nexite and manufactured at the TSMC plant in Taiwan. Tag development was completed this year, after which Nexite began running pilots in real stores, which also required adaptations.
A Guess contract
Nexite recently signed a major five-year deal with Guess, which will include deploying up to 75 million tags in over 1,000 stores. The company has launched its first commercial deployment of tags at a store belonging to Israeli retail chain Factory 54, and is running pilots at a number of other large global customers.
One competitor is Israeli start-up Wiliot, which raised $200 million in July this year, in a round led by SoftBank. Unlike Nexite, Wiliot caters to a range of industries such as pharmaceuticals, food and retail.
Nexite’s business model is based on revenue from the sale of tags, and from subscriptions to software that provides information about inventory, shelf space optimization, and sales.
Nexite employs about 50 people, all in Israel. It recently completed an additional $50 million funding round, led by Pitango and Saban Ventures, bringing total funding to $83 million. Other Nexite investors are Vertex Ventures, Battery Ventures and Intel Capital.
Nexite
- Business: Smart clothing tags
- History: Founded in 2017 by Anat Shakedd (CEO) and Lior Shakedd (CTO)
- Stats: 50 employees. Raised $83 million, including from Pitango Venture Capital, Saban Ventures, Vertex Ventures, Battery Ventures, and Intel Capital
Published by Globes, Israel business news - en.globes.co.il - on December 7, 2021.
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