Reformation’s Inventory Optimization Partner Raises $17.5 Million
Syrup Tech, the New York City-based startup that uses artificial intelligence to help brands optimize inventory and allocation plans, revealed Friday that it has raised $17.5 million in Series A funding.
Accel Partners led the round, supported by investment from Syrup’s existing backers, Google’s Gradient Ventures and 1984 Ventures.
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Using a client’s inventory data, the company can provide insights—down to the color, size and garment type—into what a retailer should be ordering to best meet demand for its consumers. It also gives real-time insights into how demand is changing and allows retailers to determine how they should allocate the inventory they’ve purchased across omnichannel sales points.
James Theuerkauf, CEO and co-founder of the startup, said this process helps address many companies’ ongoing concerns about excess inventory, which sometimes forces brands to sell items at deep discounts and means unsold products often end up in landfills.
From that point of view, he said, partnering with Syrup can help brands creep toward their sustainability promises, simultaneously addressing eco-conscious consumers’ concerns.
“There’s multiple ways to drive sustainability: using more sustainable practices and fabric, etc. But a massive one that I feel like isn’t talked enough about is let’s just get the right quantity, and then let’s find a way of how to sell the product that we have,” he said. “That’s, in my mind, a huge potential unlock for sustainability as well as profitability.…You don’t have to sacrifice profitability to become more sustainable.”
The funding will go toward increasing the startup’s headcount. It currently has 30 employees, and Theuerkauf said he hopes that number will soon be 70. His team will hire for engineering, product and sales roles.
The company will also use the funding to bolster its platform and presence with more brands, he added.
“The majority of this funding is for us to continue to build out the product—add more modules, add more features, [provide] the existing customers with more support and more features that are really value adds. The second [goal] is to be able to serve more customers…in an ever bigger and ever better way,” he said.
Theuerkauf said he hopes the new features will enable the platform to address increased use cases throughout the broader planning ecosystem and give customers more opportunities to configure the system for their individual needs.
While he declined to share the company’s revenue target for 2024, Theuerkauf said the startup has tripled its revenue year on year and hopes to “keep up with that momentum.”
The company already works with brands including Reformation, Faherty and Windsor. Going forward, Theuerkauf’s team primarily has its sights set on serving companies bringing in more than $50 million in annual revenue, he said, noting that the company currently works with multi-billion dollar brands globally.
For the co-founder, the investment marks a major achievement, given that the fashion industry can be a tricky sell for investors.
“When we got started, we didn’t get a lot of traction with VCs because they just didn’t like retail, and they didn’t like fashion,” he said. “That [Accel] is coming on board here is a really big vote of confidence, but I think we also know that this is just the beginning. We’re just 1 percent there, and this allows us to go from that 1 percent to the next few percent of our journey.”
In the longer-term future, Theuerkauf said the goal is to create an end-to-end inventory management system that starts with demand sensing for brands and extends throughout the supply chain.
“There’s a massive opportunity in the supplier community and the sourcing community [and] leveraging things like raw materials and manufacturing capacities and different logistics options—really being able to go into the supply chain. That’s what we’re looking for,” he told Sourcing Journal.
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