Now valued at $500M, Cosmose ditches Stripe to adopt Near’s crypto solution

For all the investment speculation and hype, cryptocurrency has so far struggled to find meaningful use cases. Now there’s some effort from Singapore to turn the general public into crypto adopters through blockchain payments.

Cosmose AI, a nine-year-old company that uses AI analytics to track in-store foot traffic and engage with shoppers online, is partnering with Near, one of the blockchain protocols competing with Ethereum. The pair are building a payment system that allows users to shop with crypto at low transaction fees, saving money for both buyers and sellers.

As part of the partnership, Near Foundation, the non-profit arm of Near supporting the protocol’s ecosystem development, has made a strategic investment in Cosmose. The round, of which amount is undisclosed, lifts the company’s valuation to $500 million, up from $100 million when it closed its $15 million Series A financing in 2020.

Cosmose’s suite of retail solutions includes the KaiKai app that lets customers discover retail stores in their physical vicinity and an online targeting platform, both of which are getting a blockchain makeover with Near’s help.

Miron Mironiuk, the company’s founder and CEO, didn’t intend to ride the crypto wave; rather, he was seeking a solution that would make online payments cheaper for consumers and vendors Cosmose served.

“I’m not sure if you know how expensive and slow it is to process online payments. It’s absolutely crazy,” Mironiuk told TechCrunch in an interview.

He gave the example of buying a $5 cup of coffee. Payments processing companies like Stripe and PayPal charge effectively over 10% for small transactions, so the seller ends up increasing prices, forcing the buyer to pay 6-10% more. In a year, the coffee drinker could easily be spending an extra $200 just because the transactions are handled by intermediaries like Stripe.

Pay with crypto

With its Near-powered blockchain payment system, KaiKai, where users can discover nearby products and pay via the app, claims to reduce the transaction costs of one’s annual coffee consumption to just $4, which is 50 times less than the Stripe or PayPal method, according to Mironiuk.

“Imagine how much you could save if all payments are moved to blockchain,” said the founder.

Not all blockchains are cheap to use. One of the biggest challenges facing crypto adaption is the exorbitant fees involved. Without a centralized settlement system, cryptocurrencies rely on a distributed network of validators to verify on-chain transactions. That process on Ethereum is notoriously expensive, so alternatives like Cardano, Pokadot and Near have emerged to make crypto cheaper and more scalable.

Cosmose’s team across Warsaw, Shanghai, Hong Kong, Singapore, Tokyo and Paris. Image: Cosmose AI

Cosmose’s shopping discovery app KaiKai settles payments in its native stablecoin Kai-Ching, which runs on Near’s network. The app creates a crypto wallet for users, who can top up Kai-Ching with fiat currencies. In the future, users might have the option to convert Kai-Ching back into fiat.

Cosmose keeps a treasury for Kai-Ching, which is pegged to US dollars (1 Kai-Ching = 1 USD cent) and only tradable within the app to prevent value volatility.

KaiKai first launched the option to pay with crypto in Singapore last September, where the government is in the process of formulating a stablecoin regulation. Since then, Kai-Ching has processed over 1 million transactions in the form of payments, refunds and rewards.

Prices are automatically lowered when users opt to pay in Kai-Ching. Over half of Ka-Ching’s users are Gen-Z, and they are “super comfortable” with crypto because they know “the coins are on-chain” and “they own it,” the founder observed.

The company declined to disclose how many crypto users it has accumulated, but one data point shines a light on its user behavior: One-third of the transactions are paid with Kai-Ching. Given the traction in Singapore, it won’t be surprising if Cosmose is taking Kai-Ching to other crypto-friendly jurisdictions in the future.

Own your data

Cosmose and Near are onto something that seems even more ambitious. One of the promises of blockchain-based applications is to return the control over personal data back to users rather than keeping it with Big Tech’s centralized servers.

Essentially, Near is helping Cosmose migrate user data onto its blockchain and building out a system where users can see how the firm is tracking them, including their location, when they open the app, the products they browse and how long they stay.

The goal is to store user data on their phones using edge computing and let people decide how they want to be tracked to receive more or less precise product recommendations and rewards.

“It’s not only a technical challenge. It’s also a user experience challenge of how to do it in a way that people actually can check it and get some insights and decide quickly,” the founder said.

Since its inception, Cosmose has served over 20 million stores and reached one billion phones worldwide, with China accounting for “hundreds of millions” of them. The company has a team of 80 staff across Warsaw, its engineering base, as well as Shanghai, Hong Kong, Singapore, Tokyo and Paris.

Now valued at $500M, Cosmose ditches Stripe to adopt Near’s crypto solution by Rita Liao originally published on TechCrunch

Cosmose, a platform that analyzes foot traffic in physical stores, gets $15 million Series A

Cosmose, a platform that tracks foot traffic in brick-and-mortar stores to help companies predict customer behavior, announced today it has raised a $15 million Series A. The round was by Tiga Investments, with participation from returning investors OTB Ventures and TDJ Pitango, who co-led Cosmose’s seed round last year.

The company said its valuation is now more than $100 million. Cosmose has offices in Shanghai, Hong Kong, New York and Warsaw, where is software engineering team is based. Most of the stores its tech is currently use in are in China and Japan, and its clients include companies like Walmart, Marriott, Samsung, and LVMH.

As companies try to recover from the impact of COVID-19, founder and chief executive officer Miron Mironiuk said Cosmose’s platform has helped clients make decisions about when to reopen stores and what kind of inventory to stock, and how to increase revenue.

For example, ‘some shops wanted to connect with customers who used to shop in their physical locations and encourage them to buy online,” he said. “Hotels in Japan were focused on promoting their in-house restaurants to local residents to make up for the lost revenue.” The company is also working with Boston Consulting Group on a report called “COVID-19 offline retail recovery traffic in China” for publication next week.

Mironiuk said that a PwC audit of the platform’s accuracy completed in December 2019 confirmed its ability to track customers within 1.6 meters of their location in a store, and that its data ecosystem now comprises of more than one billion smartphones and 360,000 stores. Cosmose’s plan is to grow that to two billion smartphones and 10 million stores by 2022.

The Series A will be used for product development and geographic expansion, starting with Southeast Asian markets this year, followed by the Middle East and India. Mironiuk, who founded Cosmose in 2014, said its goal is to break even and generate profit by 2021.

The company offers three main products: Cosmose Analytics, which tracks customers’ movements inside brick-and-mortar stores; Cosmose AI, a data analytics and prediction platform to help retailers create marketing campaigns and increase sales; and Cosmose Media, for targeting online ads.

Cosmose does not require hardware installation, which means no regular maintenance is required after Cosmose maps a store, and helps it differentiate from rivals.

There are other companies that also analyze foot traffic in brick-and-mortar stores, including RetailNext and ShopperTrak, but being tracked might alarm customers who are concerned about their privacy. Mironiuk said all of the smartphone data Cosmose AI gathers is anonymized, so the company doesn’t know who shoppers are. The platform uses alphanumeric IDs called OMNIcookies, does not collect personal data like phone MAC addresses, mobile numbers, or email addresses, and follows data privacy laws in each of the countries it operates in. It also allows shoppers to opt-out of tracking.

In a press statement about the investment, Raymond Zage, the CEO and founder of Tiga Investments, said “I was attracted by the strong results Cosmose is already achieving for some of the world’s recognizable brands, while simultaneously ensuring user privacy is protected. Cosmose team is saving stores while enhancing consumer experience.”