Could Atlanta be the final stop on the silk road of success for retail tech startups? As a region strong in fintech, payments, and marketing technology, many of the pieces already exist to drive the next level of brick-and-mortar retail (which, despite apocalyptic projections, is far from dead).
Sid Mookerji, a highly-successful retail tech entrepreneur, is betting on Atlanta.
Mookerji founded, bootstrapped, and led one of the first retail IT companies, counting names like Macys, Estee Lauder, Groupon and more amongst its clients. In 2015 he sold the company to a private equity firm in a highly-successful acquisition; it was subsequently acquired by Fortune 500 Cognizant.
Two years ago, Mookerji gifted $1 million to Georgia Tech’s Advanced Technology Development Center (ATDC) to establish a retail tech startup vertical, which now counts over 40 startups in the program.
Now, he’s seeding these startups in an even bigger way with the launch of Silicon Road Ventures, a venture capital fund, accelerator program, and innovation research group with the mission to drive the “future of retail, funded by retailers.”
“One of the things that I’ve been trying to grapple with is, how do you make the collaboration between the corporations and all of these startups more sticky?” Mookerji asks.
“To these corporations, sometimes this is just like a picnic — they come here for a day, they say wow, this is great, and then they go back into their holes and they’re busy fighting their own fires.”
His solution to that is a corporate-backed venture fund which aims to include about 20 non-competing retailers as LPs. Mookerji, who will serve as Managing Partner, is seeding about 20 percent of the fund personally, targeting $30 to $40 million total.
The fund was announced this Wednesday at the second annual Retail Tech Symposium at Georgia Tech. The audience at the all-day event included representatives from Macys, Starbucks, Stanley Black & Decker, Chick-FiL-A, SlimFast, and more.
Silicon Road’s retail partners — one department store, one grocer, one home improvement provider and so on — will seed the fund with $1.5 to $5 million.
The fund will invest seed capital in startups accepted into the Silicon Road accelerator, the second portion of Mookerji’s program.
The accelerator will run one cohort per year, aiming to invest in 60 startups over five years.
Startups will be recruited from the U.S., Israel, and India, where Mookerji has funded a similar accelerator program. They will receive an initial $75,000, with funding reserved for follow-on investments.
Mookerji tells Hypepotamus that, while they will be flexible as to the startup’s stage, he expects to see more mature companies as the best fit for the program. That’s because these startups will be expected to take advantage of the retailer connections that Silicon Road will facilitate.
“They will be working directly with the potential customers, so you need to have maturity in the solution,” says Mookerji.
In fact, in addition to the capital, the corporate partners will commit to a minimum of signing two startup pilots or contracts per year.
“They will get face-to-face time with every retailer LP. They will also do reverse pitches, so the startups understand the challenges the retailers are trying to solve,” he says.
The final pillar is research on innovative technology, for which Mookerji and Silicon Road will provide a 2500-square-foot retail tech innovation lab in the Centergy Building in Tech Square, a few floors above the ATDC.
Corporate partners will be able to utilize the innovation lab to meet with startups, professors, and researchers to explore their business problems and receive advising. Mookerji wants it to “provide a bridge between the research labs to the business industry.”
The Symposium also included pitches by several startups that have benefited from the retail tech program seeded by Mookerji in 2017. Mookerji says they have already begun accepting applications for the accelerator and speaking with potential fund partners, and plan to kick off the full program this summer.