Coros, a real-time visibility provider for e-commerce and parcel fulfillment, announced Wednesday that it has raised a $6.1 million seed round of venture capital funding led by Dynamo Ventures. Susa Ventures, Greenhawk Capital, Fontinalis Partners, Engage VC, Flexport and Stord CEO Sean Henry also participated in the round.
Coros was founded in December 2020. The company is helmed by Chief Executive Officer Martin Hitch, who previously held leadership roles including CEO and chief business officer at retail automation startup Bossa Nova Robotics from 2010 to 2017.
Coros deploys ceiling-mounted computer vision-enabled IoT scanners in fulfillment centers to reconcile warehouse management system (WMS) plans with the parcels that are physically loaded onto a carrier’s trailer. By rapidly scanning parcels as they move from the fulfillment center to the trailer via conveyor belt, Coros improves the accuracy of e-commerce fulfillment operations, instantly identifying parcels that are loaded onto the wrong trailer or that are missing from a trailer based on the WMS plan and trailer manifests.
“Coros is building the visibility platform that the high-growth parcel sector deserves and needs to support long-term growth exceeding 15% this year,” said Santosh Sankar, a partner at Dynamo Ventures. “Coros’ data is extremely accurate and can provide best-in-class shipment visibility, but more importantly helps shippers and 3PLs monitor their fulfillment operations and take action to avoid mispicks, delays and customer dissatisfaction that can amount to more than a billion dollars of cost at some of the world’s largest shippers.”
Dynamo moved quickly to invest in Coros, sending a term sheet two weeks after first meeting the founding team and closing the round within about five weeks total. An abundance of available capital in private markets has encouraged venture capitalists to see deal velocity as an increasingly important part of their value proposition. That said, Hitch affirmed that Dynamo’s deep domain expertise — the sector-specific firm focuses on supply chain technology startups — is especially valuable for seed-stage companies.
Hitch explained that Coros’ solution is meant to help parcel shippers rise to the challenge of mounting e-commerce volumes and mounting consumer expectations for on-time delivery and order accuracy. More than 3 billion parcels were shipped in the United States between Thanksgiving and Christmas in 2020. Meanwhile, survey data indicates that consumers have very little tolerance for last-mile delivery errors, with most consumers saying they’ll stop shopping at a merchant after just two or three delivery errors.
“There’s a perfect storm of volume going up, expectations going higher, and the solution today is to throw more labor at it,” Hitch said. “But you only have to look at any media outlet on any given day to understand that there isn’t any labor.”
At fulfillment centers, parcels fall off conveyor belts, are not loaded into a trailer before it’s cut, or are loaded into the wrong trailer. When those kinds of mistakes occur at the fulfillment center, on-time delivery rates plummet; more often than not the only lever available to the shipper is to upgrade the parcel’s service level with the carrier, substantially increasing shipment costs.
“We can close the gap between the WMS plan and what actually happens by driving real-time data that becomes the source of truth and enabling our customers to make those changes on the fly,” Hitch said. “We increase load accuracy so that on-time delivery performance is more likely to happen. If you start there at the shipper facility and get that right, and the trailer leaves on time by its cutoff with the right load, the likelihood is that all those delivery commitments will be met.”
While Coros’ primary focus is ensuring load accuracy at the shipper facility, it’s also running tests with FedEx to move its visibility solution all the way downstream to the final-mile delivery vehicle, the loading and unloading of which is another crucial handoff point.
Hitch said that enterprise shippers demand solutions that are truly scalable, reliable and secure, and that’s what Coros has worked toward. While Coros designed its scanners, which can be self-installed by the customer above loading bay doors in less than one hour, the company has eschewed deep-tech hardware component development to focus on the software platform that powers Coros’ vision system, alerts and WMS integrations.