There is an arms race happening right now in data and AI; data infrastructure and pioneering technologies will play a major role in determining the winner. But much of the focus in these areas has been on digital-native industries such as SaaS and adtech; while multi-trillion dollar industries such as consumer goods have been woefully underserved, leading to many missed opportunities.
Today we are thrilled to announce that Harmonya – a company born out of the Team8 Enterprise Foundry in 2021 – has raised a $20M Series A to transform CPG and retail with AI-powered product data. As we detail below, we have every reason to believe that this team is on its way to disrupt a market that’s dominated by legacy data vendors, and become a force to be reckoned with.
A Village-Validated Pain Point
Team8’s ideation company-building process focuses on large markets that are undergoing meaningful digital transformation. This transformation often provides the opportunity to bring meaningful data-driven innovation into a rapidly changing market.
Today’s global consumer packaged goods (CPG) industry accounts, according to estimates, for $5.3 trillion in annual sales. But the current retail landscape has largely been overlooked by data technology startups, which tend to think of it as conservative and difficult to penetrate. By leveraging Team8’s Village of strategic alliances and the business connections and market insights that it entails, we were able to understand how this industry could benefit from a modern data infrastructure that can leverage the recent advances in AI – and be willing to pay for it. CPG is a huge market where data plays a crucial role, and current solutions are severely lacking.
It’s no secret that data infrastructure is a strategic priority for Team8. Our data practice, led by managing partner Aviad Harell, is undergoing substantial growth, with significant effort being dedicated to advancing this domain and building the next generation of data companies.
Part of this effort is Team8’s Data Village, which currently includes more than 85 C-level executives and data leaders from multi-sector companies, with a significant presence of Fortune 500 and Forbes G2000 companies. As part of our ongoing ideation and validation processes, the Village allows us to initiate conversations with many data leaders, including individuals who lead data operations at some of the largest global enterprises in the retail space. And we were hearing the same challenge and demands mentioned over and over again: a product data that will prepare CPG companies for the AI era is highly needed.
When Value is Locked Behind Rigid Data Models
CPG companies (think Procter & Gamble, Nestle, Unilever, etc.) don’t sell their products directly to consumers. They operate through the large retailers – which own the data that CPGs need in order to identify consumer preferences, capitalize on emerging consumer trends, and benchmark their performance against competitors. However, that data is frustratingly siloed and gated. Access is offered exclusively through a handful of legacy brokers known as syndicated data providers, who deliver it in a static and inflexible data model that is limited to pre-defined product classifications.
Without going too deep into the weeds, the end result is that retailers and CPGs are very limited in the types of questions they can ask. Identifying shifting consumer preferences for new categories of products – such as sustainably-sourced ingredients or keto-friendly beverages – is a project that can cost millions of dollars and take years to come into fruition. This problem is acutely painful for CPGs that need this data to answer the most basic questions about their product and marketing strategy, and in actionable timeframes that allow them to make effective business decisions . This is also a glaring pain point for retailers who are looking for better and faster ways to monetize the data they sell to CPGs.
Once we identified the pain, building a new company in this space was almost a no-brainer. And within two years, the Harmonya team managed to deliver a product that far exceeded our expectations.
The ‘Wow’ Moment
Harmonya uses modern data infrastructure and the most cutting edge AI technology (including LLM’s – Large Language Models) to deliver highly sophisticated analytical capabilities at a fraction of the time and cost compared to legacy players.
Harmonya’s proprietary technology ingests information from millions of online product listings and creates unique tags from titles, descriptions, ingredients, consumer reviews, and more – which it can then translate into instant invaluable insights about market share, consumer trends, and marketing possibilities. These are capabilities that would have been hard to imagine for people in the CPG industry.
This type of innovation is a testament to the power of modern data technology, and confirms our thesis – that there is still plenty of room to innovate in this space, especially in areas that are less crowded with competing startups.
And the market is already responding…
Hitting Milestones at a Record-Breaking Pace
Harmonya was founded in 2021 as part of Team8’s unique company-building model. Since then, we’ve seen every validation signal materialize:
Customers. The foremost positive signal for any product is people who are willing to pay for it. Harmonya’s customers include four of the top ten global CPGs as well as some of the largest US retailers. The company has grown its customer base significantly in the first half of 2023 – a major achievement for a Seed startup operating during an economic crunch.
The team. We could not think of a more qualified group of people than the founders who took the helm at Harmonya: CEO Cem Kent, an experienced operator who sold his previous startup to WalMart; CTO Dima Machlin, who was the chief architect of Salesforce’s Einstein AI; and Head of Product Ran Etzion, who left his role as Head of Data and AI at Team8 to join Harmonya.
The investors. The current round was led by Bright Pixel Capital with the participation of Team8 as well as Arc Investors, J Ventures, Silicon Road Ventures, Allen & Company, LiveRamp Ventures, and Susa Ventures. These are investors with deep industry knowledge and a wealth of connections in the CPG space. Their willingness to get behind this team is another strong signal that this is something special.
More Transformative Innovation in the Works
Harmonya’s journey has only started. We are confident that the team will maintain its record of flawless execution as it scales up operations. We’re looking forward to seeing how they will incorporate new developments in data and AI to continue delivering value to customers.
At Team8 we are proud to see another team of amazing founders start with a clean slate only to emerge with a groundbreaking technology, an amazing team around them, along with select first-tier customers committed to their product and plenty of capital to allow them to operate and build up their company.
Their success is part of our continuing mission: to foster an ecosystem of innovation that supports the next generation of brilliant entrepreneurs who are changing the face of enterprise data. Good luck to all!
