Dive Brief:

• Grabango, an automated checkout technology company whose software was used by Aldi and piloted in several U.S. convenience store chains, has permanently ceased operations, a company spokesperson confirmed on Thursday.
• Grabango was founded in 2016 by Will Glaser, who previously launched subscription-based music streaming service Pandora. Less than a decade later, the company found itself unable to secure the funding needed to continue operating, the spokesperson said.
• It’s unclear at the moment how Grabango’s demise impacts the retailers it partnered with over the years, also including 7-Eleven, GetGo Café+Market, Circle K, MAPCO, Coen Markets and Chevron.

Dive Insight:

News of Grabango closing down comes amid declining interest in pricey store technology from retailers and more than a year after the company laid off workers across several departments, including marketing, engineering and sales. 

At the time, Chief Marketing Officer Ken Fenyo declined to share how many staffers were let go, although multiple LinkedIn posts from impacted team members indicated cuts touched 40% of the company’s workforce.

Now, Grabango has shut its doors entirely after failing to pull together the funding necessary to keep going. In a statement, the company said the decision to close operations “was an extremely difficult one to make.”

“The company would like to thank its employees, investors, and clients for all their hard work and dedication,” Grabango’s spokesperson said in the statement.

Similar to Amazon’s Just Walk Out technology, Grabango kept track of what shoppers picked up inside the store as soon as they entered. When ready to leave, customers would scan a code in the Grabango mobile app, and their payment would automatically process.

Despite its enticing promise to eliminate checkout lines, automated technology like Grabango’s has struggled to gain traction with retailers. Although many stores have piloted these systems, most have opted to roll out less-expensive self-checkout kiosks on a wider scale. Retailers are also being careful with their spending on technology as consumers’ budgets have tightened.

Amazon, which pioneered automated checkout with its Just Walk Out system, has scaled back the technology in its own stores and is primarily focused on selling it to vendors in stadiums, airports, college campuses and other high-traffic areas.

As recently as last month, the Berkeley, California-based was searching for additional retail partners to deploy its technology, but it was trying to stay in a specific niche. "We’re not working on stadium or airport deals,” Glaser said in an interview at that time. “We’re looking for retailers that already have a consumer base.”

Grabango made waves in the convenience-store industry when it partnered with GetGo and its parent company Giant Eagle in 2020. Over the next two years, its technology arrived at convenience stores under the Circle K, BP, MAPCO and Chevron banners.