Halla, a startup that uses machine learning and AI to power food recommendations for grocery shoppers, announced today that it has raised a $1.4 million seed round led by E&A Venture Capital with participation from SOSV. This brings the total amount of money Halla has raised to $1.9 million.
Halla has a B2B platform dubbed Halla I/O that helps recommend relevant food products to shoppers. As we wrote at the time of Halla’s launch last year, the “company created an entirely new model and a new taxonomy that doesn’t just look at what a food item is, but also the molecules that make it up, a map of attributes linked to other food as well as how people interact with that food.”
So if you are using a grocer’s app with Halla I/O built in, the app will serve up intelligent recommendations as you continue to shop online. Buy salt, it could recommend pepper. By salt and noodles and beef, and it might guess that you are making a bolognese and recommend tomato sauce.
If you read our coverage of Halla last year, you’d notice something different about the company now. Initially, its go-to market strategy included both grocery stores and restaurants. But in the ensuing year, Halla has abandoned its pitch to restaurants, choosing instead to focus exclusively on grocery retail.
“What we’ve found is that the market timing was screaming ‘where tech meets grocery,'” Halla Co-Founder and CEO Spencer Price told me by phone recently, “The restaurant space is more crowded for building recommendations.”
But all that work in the restaurant space didn’t go to waste. “The truth is we were able to keep all of our learnings from restaurant and made our grocery recommendations stronger,” Price said. “One core learning is that restaurant dishes and menu items, as long as they have descriptions, are just recipes without instructions.”
Halla now has more than 100,000 grocery items and one hundred million unique grocery transactions from retailers across the country in its data set, informing its machine learning algorithms. Price is quick to point out that Halla does not have any personally identifiable information on people. “We can make recommendations to customer X without knowing who customer X is,” Price said
Though a grocery chain can move a lot of product and provide a lot of data for better purchasing recommendations, grocery chains as a whole do not move quickly. To get them to adopt a new technology is like turning a battleship — they need a lot of time to execute. “They’re not looking for speed,” Price said, “but a reliable solution.”
To this end, the biggest thing Halla’s funding buys them is time. “We’ve bought some runway,” said Price. The company now has some breathing room to take its time and conduct even more tests with slow-moving retailers. Halla is in tests with unnamed grocers right now, and offers its recommendation on an API pay-per-call model.
AI-based B2B food recommendation is almost its own mini-industry. Spoonshot, Analytical Flavor Systems, and Tastewise all use vast data sets to make product predictions and recommendations to restaurants and CPG companies. Other companies like AWM Smart Shelf are using a combination of prediction and smart digital signage to make in-store grocery purchase recommendations.
With online grocery shopping reaching a tipping point, people buying food via apps adding one or two more items to their cart because of intelligent recommendations could mean a nice sales boost for the grocery industry.