Nike has announced their acquisition of Celect.
Celect will become the core platform of Nike’s AI strategy, powering their global supply chain and inventory management process; the goal to be able to reduce the time to make inventory demand predictions from 6 months to 30 minutes!
As significant investors and Directors in the company, we at NGP Capital are delighted with the outcome for shareholders and employees. We were attracted to Celect as an investment opportunity for three reasons.
1) Solving a critical and expensive problem: Consumers have come to expect their chosen product to be available in the right size, on the right shelf (or website), at the right time. This puts tremendous pressure on brands and retailers to allocate their inventory intelligently at their warehouse and to individual stores. Celect’s ability to reduce excess inventory using accurate real-time predictions promised lower inventory cost, greater customer satisfaction, and a smaller environmental footprint (pun intended!) to brands and retailers.
2) Transformational technology: Celect ‘s core technology — Predictive Insights on unstructured data based on Tensor Completion — is considered one of the top AI inventions to have originated from MIT. Unlike many currently hyped AI technologies, which are used for modeling, but are still far removed from daily usage, Celect’s AI was deeply embedded in customer workflows delivering value across their supply chains. The company focused on serving the needs of merchandisers, planners and store managers, from a single platform, augmenting their workflow with automation and predictive power.
3) Amazing founders and team: The two MIT professors (both Stanford PhDs) who invented the technology inside MIT, decided to commercialize the technology by leaving their comfortable jobs and surrounding themselves with an equally talented team. Over seven years, the company built a highly differentiated and scalable platform, which led to tremendous adoption amongst top retailers in US and Europe.
We find this a great validation of our original investment thesis. Congratulations to John, Vivek, Devavrat and the entire Celect team for building an amazing company and becoming part of Nike, one of the world’s most iconic companies!
How retailers can make the most of their data? Watch the video interview with Rohini Chakravarthy (Partner, NGP Capital) and John Andrews (CEO, Celect).