TCV also took a minority stake in the Helsinki-based startup as part of the deal, which marked the first major investment announced by TCV since the firm revealed last week it had raised $3 billion for its new tech-focused fund, TCV X.
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Previously, 14-year-old Relex had just raised $23 million, according to its Crunchbase profile. Relex’s existing investor Summit Partners will retain an equity stake in the company and will continue to hold a seat on its board.
Relex works with retailers in EMEA and North America to provide “accurate forecasting and replenishment, localized assortments, profitable use of retail space, and optimized workforce planning.” It says it has consistently achieved 50 percent year-over-year growth with customers such as Coop Denmark, MediaMarkt, Morrisons, PartyCity, and WHSmith, among others.
“The more complex a retailer’s operations are, the more they have to gain” from Relex’s offerings, says CEO Mikko Kärkkäinen. “Our vision is to change how the field works by driving a more responsive unified planning process.”
He adds that Relex’s customers typically see a 40 percent reduction in waste, a 30 percent reduction in inventory and an 85 percent decrease in out-of-stocks.
“All of which increases sales and positively affect retailers’ bottom lines,” says Kärkkäinen.
Relex plans to use its latest capital to accelerate its product development, “hire more tech talent” and further expand its retail-specific machine learning and AI capabilities. The company also aims to tackle the shameful dilemma of food wastage in developed countries. About 43 billion pounds of food — about 10 percent of the available supply — is lost each year as a result of inadequate forecasting and replenishment practices in food retail in the US, according to the US Department of Agriculture.
“Technology like Relex’s can help food retailers prevent both food wastage and revenue loss by optimizing their retail planning,” Kärkkäinen added.
John Doran, a UK-based general partner at TCV, notes that TCV’s strategy is to invest in tech companies it believes are focused on disrupting large industries and “big markets.”
“Relex provides a highly differentiated and modern solution that provides retailers with significant ROI in the form of inventory reduction, waste reduction, less time spent on ordering and improved stock availability,” he wrote via email. “We believe that it is addressing a huge market, and based on market feedback, is the best-in-class solution.”
Illustration: Li-Anne Dias