Why We Invested: Kuona

abr. 19 - 2024
Why We Invested: Kuona

A Data-Driven Retail Revolution: Seizing Opportunities in Shifting Landscapes

In today's data-driven world, advanced analytics power a staggering global value of over +$15 trillion, with the retail sector alone contributing more than +$600 billion to this vast landscape. Yet, amid this wealth of information, retailers face a critical challenge: understanding ever-evolving consumer behavior and adapting to market changes. As consumer preferences shift and price sensitivity becomes paramount, companies must turn to AI-driven insights to stay competitive. Such insights include external factors like weather, seasonal trends, product cannibalization and competitor pricing. The focus now pivots from simply accumulating data to extracting meaningful, quality-driven insights that drive actionable strategies.

CPGs and retailers typically struggle to leverage the wealth of data at their disposal. When it comes to revenue growth management (RGM), Kuona’s area of expertise, firms use old-school tools such as Excel to analyze only a small portion (typically <0.1%) of their annual pricing and promotional volume. Efforts to work with software development companies to build the tooling in-house usually fall flat as revenue growth management is one of the most complex areas within a CPG and retailer.

Kuona: Revolutionizing Retail Insights Beyond Traditional Boundaries

Kuona's SaaS offers an end-to-end suite of solutions focused on pricing, promotion optimization, inventory management, trade promotion management and market monitoring. Their neural network-based models leverage real-time data to generate the most granular level of insights possible, going down to the SKU and store level. Revenue growth management teams drive improved performance and, equally as important, understand the “why” behind it. Teams can easily monitor via Kuona key variables such as sales, volume, market share, cannibalization and profitability to determine whether a pricing, promotion, or packaging strategy works. Unlike any other player in the market, Kuona works with both sides of the equation: retailers and brands.

Kuona primarily drives revenue via Pricing & Promotion Optimization (P&PO) and Perfect Order (PO). The former allows clients to simulate hundreds of thousands of possible promotions no matter the promotional mechanic, key variable, region or product, all based on their own proprietary data complemented with a variety of actionable 3rd party data. Additionally, customers can analyze historical promotion activity to determine what variables drive changes and can leverage Kuona’s custom built analytics platform. Perfect Order provides real-time analysis of inventory and leverages. Perfect Order is an inventory optimization solution that creates high-accuracy sales forecasts, assortment optimization and order recommendations down to both the SKU and store level. Retailers and brands can get real-time support and insights on which products to discontinue, which to double down on and what the most optimal product mix is for their specific scenario.

Behind Kuona's Success: A Team Creating Retail Tech's Future

Kuona’s co-founders, Chema San Sanroman (CEO) and Agustín Magaña (CTO) became experts in the CPG and internet infrastructure industries. The former was at Xignux for over 6 years before leaving for his MBA at INSEAD, while Agustín had multiple technology and product roles at NIC. Originally envisioning Kuona as a consumer facing app focused on the consumer shopping experience, the pair realized that there was a bigger problem to solve in an obscure but incredibly important space that Chema had worked in: revenue growth management. After graduating from YC, the two have surrounded themselves with operators who lived first-hand the pains experience daily by RGM teams. This team includes their Director of Sales Rommel Silva, who led pricing strategies at companies like Heineken and Coca-Cola FEMSA, and Director of Operations Enrique Perez who most recently was the Director of RGM for Heineken Europe and a Sr. Director at PepsiCo’s RGM Division in Brazil.

The Power of Collaboration: Kuona & FEMSA

FEMSA Ventures’ investment in Kuona represents a strategic partnership aimed at mutual value creation. Leveraging FEMSA's extensive reach in the CPG and retail industries throughout Latin America and Europe and Kuona's next gen approach to RGM, FEMSA Ventures envisions a relationship where Kuona's analytics prowess enhances the capabilities and execution of FEMSA's brands. By enabling our internal teams to optimize pricing, promotions, and inventory management, Kuona facilitates collaborative efforts and synergy between brands and retailers, driving mutual growth and efficiency.

Kuona has been working with OXXO since 2022 and is a promising component behind their industry- leading RGM strategy. Separately, Kuona has now recently partnered with our retailer in Europe, Valora. This marks their first key expansion outside of LatAm and a core component of our global enterprise SaaS thesis.

We’re incredibly excited to partner with Kuona as they revolutionize the RGM landscape and grow not only in Latin America but globally.