After 16 months of relentless aggression from Russia, Ukraine has been devastated in: life lost and economic collapse. But the fog of war can sometimes obscure more mundane realities. For example, the fact that many people continue to live and do business in cities like Kiev, the capital.
a company, neuro shophas developed a vending platform for the business-to-retail (B2B) market based on smart refrigerators. The startup’s young management team and core investors took a business-as-usual approach even in the midst of a deadly war.
The company’s eponymous product is based on an idea that is now increasingly accepted, thanks to Amazon.
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In Neuroshop’s case, a camera tracks a user’s hand while other technology automatically determines what’s missing and the consumer’s preferred payment method (usually a credit card pre-authorized via an app). billed through
The system uses three technologies to make it “smart” and viable: RFID scanners, scales and computer vision. Although the scale and scanner independently judge the products left in the refrigerator, they primarily check the camera’s “judgment” and act as a control to prevent errors.
“Combined with computer vision to place products neatly on shelves, the system works smoothly. Meanwhile, retailers and retailers can also receive timely notifications about food expiration dates.” Neuroshop CIO Alexander Goncharov said.
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neuroshop Now a 100% investor, owner and managing partner, he says his experience at Uber about 10 years ago was “awesome”, all done through the app, and that’s what drove the company’s current direction. told me Since his founding in 2018, Neuroshop has focused on various retail solutions, but it wasn’t until 2019 that he made the decision to tap into the vending market for smart refrigerators.
Vending machines are familiar to most people, but little has changed over the decades. More recently, credit card readers, touch screens, cameras, and other technologies have been added, expanding the product range. in places such as airports.
Neuroshop is valued at a market value of $52 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 10.7% from 2022 to 2030, according to Grand View Research, the world’s leading retail vending machine. We see a gap in the market. The Kiev company is entering the chilled food sector, where busy lifestyles are driving demand for on-the-go snacks, and other players are eyeing it.
Transition from test phase
So far, Neuroshop has installed equipment in offices, and the next step is the retail environment. There are about 20 refrigerators in Ukraine, 4 in Poland and 6 in the United Arab Emirates (by July). Plus Denmark and Moldova. All are located in the business center and have a shared kitchen or dining room.
Ukrainian partners include: Mr GrillМ’ясторія (myastriya), culinary art, Су-øеф (Sous Chef), and in Chisinau, Moldova, the partners are lunchtime. The testing phase has now ended, lasting about two years, and is now being rolled out, ramping up production.
Products available at the unit range from $2 to $3.50 in Ukraine for ready-to-eat meals, salads, soups, sandwiches and burgers. The stats look healthy. Each unit sells about 400 plates a month and generates about $1,150 in revenue, of which $350 is profit. “Consumers will be surprised by the concept at first, but once they get used to it, they will love the fact that they don’t have to ‘do’ anything to get their food out,” said Alexandre Pivtruk, product leader at Neuroshop. said.
The refrigerator has a QR code that consumers first download and use to enter their credit card details. You can then use your phone’s camera to unlock the refrigerator door via a code and retrieve what you want.
The app is integral to the product as it acts as a marketplace that connects Neuroshop’s clients (refrigerator buyers) with users and food suppliers. “For example, a consumer can select (from a complete list of connected suppliers) the items they want in their refrigerator, and the refrigerator owner will consider these ‘leads’ when creating the next week’s menu. We could put it in,” said Pivtruck. .
During the testing phase, some expected and unforeseen issues were resolved. This was crucial in establishing a “proof of concept”. “Only by making sure our business model is functional and sound, and that all processes, including production, are set up and working properly, can we jump into our planned funding round. ‘, said Goncharov.
The company is building a network of distributors and dealers with the aim of becoming a B2B solution provider in food vending rather than a B2C player. “Our retail partners know where they want to sell and what food they want to sell to consumers. So there are two solutions. It is a white-label service for large companies that we know, while our franchise option is for companies that want to buy refrigerators as a new greenfield business, and we will help them with the operational side,” explained Goncharov. bottom.
The latter off-the-shelf franchise model was launched in Ukraine and Poland, but manual white label options are also offered in other countries. So far, geographic expansion in the UAE, for example, has happened more by luck than by design. But a broader growth strategy is to target European Union countries, and out of interest Neuroshop is starting to look to the US and Canada.
in a fighting stance
Logistics of expansion during war can be complicated. Neuroshop is headquartered in Kiev and has a small office in Poland. Together, we employ about 40 people. In Ukraine, men between the ages of 18 and 60 are not allowed to leave the country for conscription for up to one year. For this reason, the Polish office is run by female employees.
There are mechanisms to “reserve” some of the company’s staff so that the business can continue to function, but that involves a lot of bureaucracy. At the beginning of the conflict, the plan was to move the company to western Ukraine, but that never happened. “We’ve adapted to the air raid warning and our new life,” Pivtruk said, with a “keep calm and carry on.”
Some issues inevitably impact operations, such as lost Internet connectivity, sometimes lasting up to 60 hours, not to mention the psychological impact on staff. In general, businesses in Kiev are warned in advance by the power company, so they know when the electricity will run out. “We’re planning meetings around this so that developers who are working from home can be online during those hours,” Pivtrack said.
“More than a year into the war, and most importantly, we now have great faith in ourselves, our products and our country. We are much stronger than before the war started and everyone is much more optimistic than before,” Goncharov said. “We also believe that being in Ukraine will allow us to grow regardless of power outages, missile attacks and possible future attacks. We are expanding our network of devices very quickly.”