Sneaker fit startup Neatsy.ai has snagged $1 million in seed funding after a B2B pivot. Investors in the round include Cabra VC, Flyer One VC and some unnamed business angels.
The U.S. startup, which was founded back in March 2019 by Artem Semyanov (the former head of the machine learning team at Prism Labs), is now fully focused on selling its fit-tech to e-tailers via an SDK.
Neasty's approach relies on 3D scanning technology found in the iPhone X or later (aka, the TruthDepth camera for FaceID) -- so (currently) it only works for a subset of iOS users.
The AI has also only been trained to provide personalized fit recommendations for a handful of sneaker brands at this stage: Namely Nike, Jordan, Converse, Adidas, Reebok, Yeezy, Puma, New Balance, Asics, Under Armor and Vans.
But it's eyeing expanding its fit recommendations with the seed funding.
For those who can tap into its tool, Neatsy claims the tech measures the foot with an accuracy of 1-2 millimetres (it also flags that all scanning takes place on the user's device itself to maintain privacy).
For its B2B model, Neatsy is monetizing SDK usage based on the number of users -- setting a price per Monthly Active User.
And for e-tailers it touts an average drop of 39% in shoe returns as online shoppers are able to get a virtual gauge on the best fit and so will be able to pick a better sized pair of kicks for their feet -- which it also claims translates into a 20% increase in ARPU (or an additional $0.5/month per user).
So far it has two e-commerce marketplaces/fashion industry enterprises signed up to use its tech -- driving its annual revenue (ARR) to hit $120,000 over the past year.
It also slates a number of ongoing pilots that it's hoping will convert into paying customers.
"All the paying clients are currently in Europe, we also see great potential in the further rollout to European markets... as Germany, the U.K., France are home for great sportswear and fashion companies, as well as for large online fashion marketplaces. As well as thousands of SMB shops and brands for whom we are developing an entry-tier product," says Semyanov.
"We are also looking at the U.S. market, as we currently have several brands testing our tech (yet for free) but we are optimistic here. Probably you remember Nike was announcing the launch of the Nike Fit app a couple of years ago but somehow it never saw the light of day. We would be happy to help them with our tech (kidding, or not)."
As well as pushing to sign up more e-tailers, Neatsy plans to use the seed funding to dial up its product development. On that front, Semyanov says it's looking to diversify the range of supported footwear -- to include formal shoes and children's footwear.
He says it's also trying to hone its AI to be able to pick up on specific foot conditions -- such as detecting flat feet and hyperpronation.
Launching versions of the tech for the web and Android is also on the cards, as 3D depth cameras have proliferated over the past few years -- with a number of Android smartphones also packing this kind of camera hardware (such as Samsung's DepthVision tech).
The seed fund will also go on simplifying the product integration process and building a customer success team, per Semyanov.
Asked about potential orthopaedics use cases, Semyanov says Neatsy got interested in how the 3D measurements could help with conditions like Pronation/Supination after being contacted by the NFL's San Francisco 49ers last year.
"[The 49ers were] interested in whether we could test the newcomers of pronation and supination, because it’s extremely important for future players. Turns out that Pronation is the main factor in injuries in running sports. We were unable to help SF 49ers at the time, and never thought of this feature before. We started looking into the topic and after some testing and research we concluded that we actually could make it work," he says.
"If you look at the feet from the side, you could distinguish whether it is pronated or supinated, and we 'look' at the feet with the camera measuring depth and distance therefore we could teach the algorithm to identify that."
"This is for sure going to be one of a few next developments for Neatsy’s product," Semyanov adds. "We are currently consulting with the orthopediologist and it seems that this is a huge problem not only for professional sportsmen but for everybody."
Smartphone cameras are already powering plenty of activity (and investor activity) in the digital health space -- with a number of startups focused on using camera-based tracking to help with musculoskeletal disorders for example (e.g. Kaia Health).
Returning to retail use cases, Semyanov says Neatsy.ai is also considering expanding to support fit for specialist kit such as ski and snowboard equipment -- given that ski shoes tend to be pricey ("and it’s always painful for people to misunderstand the size").
But in the near term he says the focus will be on adding fit recommendations for kids' shoes, given the size/fit issue can be especially tough for little growing feet.
It does also have e-commerce-related ambitions beyond feet too -- if it can get 3D-scanning to work for other retail use cases.
"I always say that in the future all the sizes or size charts will become obsolete, and only ‘Your Size’ will exist for each customer. With the help of our algorithm, it is gonna happen with the shoes and we’ll see if it could be applied to clothes and eyewear as well," he adds.