Foot Traffic Startup Scraffic Mulls New Funding, Machine Learning

San Antonio—[Updated and corrected 2/15/19, 10:53 a.m. CT. See below.] Scraffic, a small startup that helps retailers count foot traffic in their stores, has gone international.

The San Antonio-based business, which has four employees, now has customers in the Philippines, Spain, and Canada, as well as users in the U.S. Scraffic found opportunity to expand in international markets like the Philippines because there are fewer competitors, says Ryan Ward, Scraffic’s chief operating officer. Founded in 2016, the company’s price point helped, too: it charges $35 per month to use its person-counting software and camera system. Other foot-counting services often charge a few thousand dollars for installation fees or the hardware, he says.

Now, Scraffic is considering raising a small round of venture funding as at continues to expand, having previously only raised $150,000 in a friends-and-family financing round, Ward says. The company has sustained itself on its own sales, and is projecting $2.7 million in net revenue in 2019, he adds. That projection number has not been finalized, however. After the interview with Ward, Scraffic CEO John West said via e-mail that the revenue projection is “incorrect,” but he declined to share an updated figure. [Added CEO comment.—Eds.]

Scraffic works with partners internationally that sell and distribute its systems to large, name-brand corporations and small companies alike. Scraffic sends a business its traffic counter—it includes an off-the-shelf camera and a proprietary processing chip—which the customer can self-install on the ceiling above the entrance of a store. The camera connects to the Internet, and Scraffic can link to the camera remotely to calibrate it for the store. That includes adjusting it according to the lighting of the store and making sure the camera and software track the right people an objects: adults, children, and people, not shopping carts. Ward was recently awake at 2:30 a.m. CST calibrating a newly installed camera for a customer in Manila, Philippines. [Paragraph updated to remove the names of businesses that Scraffic’s partner works with.—Eds.]

Examples of other retail foot-traffic trackers abound, from apps that piggyback on the iBeacon to something as simple as camera and equipment makers. Other startups have entered the market, too, like San Francisco-based Dor, which added $3.8 million in seed funding last year.

That stiff competition is part of the reason Scraffic has been going global. Scraffic also was able to more nimbly expand to Asia because it found a partner that sells point-of-sale systems to retail customers in the Philippines, Dynamic Global Enterprise Systems. That company already had a large network, and it was able to sell the Scraffic device as a white-label product to existing customers. The startup has similar licensing relationships in Spain and Canada, as well as potential licenses elsewhere. Another partner is Boston-based Springboard Retail. [Corrected to remove the name of a country where a license deal hasn’t been signed.—Eds.]

The data from the Scraffic system can be used in conjunction with other data a store might use—such as from a point-of-sale system—helping owners or managers determine how many customers are actually buying something, monitor how frequently things like dressing rooms need to be cleaned, or set up employee schedules, Ward says. Scraffic is also pursuing adding a machine learning algorithm to its software so that their customers can forecast things like expected customer count.

Scraffic’s $35 price point makes it appealing to both large and small customers, Ward argues. Businesses with big budgets for monitoring foot traffic can deploy it across each of their hundreds or thousands of stores, while small mom-and-pop shops can afford to pay for it too, he says. That’s particularly true for less wealthy countries like the Philippines, Ward contends, where some competitors haven’t entered because their product costs too much.

“They’re really under served with this technology,” he says. “Being able to provide an affordable solution that’s easy to set up, we’re one of the first solutions that they can deploy rapidly.”

Ward expects Scraffic to make new hires this year, in marketing, sales, and software development, bringing the staff from four people to 10.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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