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Angi, formerly Angie’s List, remains one of the most well-known startups to break it big, becoming the go-to place for many people when searching for home services such as repair workers and painters, and a reliable place for those skilled tradespeople to find customers.
Now Angi’s former CEO and chief product officer Oisin Hanrahan wants to do the same type of thing for a wholly different industry: consumer packaged goods (CPGs).
Today, his new startup Keychain — based in New York City, it aims to connect packaged food brands with reliable manufacturers in an online search and sorting service — emerges from stealth with $18 million in seed funding led by Lightspeed Venture Partners, Box Group, Afore Capital, Ron Conway, and others.
“What we’re doing is building the first true platform and marketplace for CPG manufacturing,” Hanrahan told VentureBeat in a video conference interview. “Retailers and brands have a very specific pain point: when you ask them what’s the hardest part of running their business they say finding a great manufacturer.”
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Solving a longtime business problem: matching CPG manufacturing demand with supply
According to Hanrahan and his co-founders at Keychain, there are approximately 20,000 different manufacturers in the U.S. alone and many more different branded products sold on store shelves of major grocery stores, supermarket chains, and retailers.
Hanrahan was motivated by his own experience as a consumer, sorting between the vast plethora of different products to find ones that did not contain the specific nuts to which his daughter was allergic.
He realized there has been a “huge shift” over the last decade in the CPGs sold in the U.S.: “the rise in the private label.” That is, whereas before many grocery stores sold products under brand names owned by external companies, General Mills and Kellogg’s cereals, for example, most leading retailers have since begun offering their own store-branded products alongside these.
“We’ve seen it in every retailer: Amazon with Amazon Basics, Whole Foods with 365, Costco with Kirkland,” Hanrahan explained on the call.
And while some of these store-branded products are designed to be cheaper than the external brand offerings, many are not, and instead are designed to cater to the unique tastes, dietary needs and issues, and preferences of their clientele.
Yet, at the same time, most retailers are not also manufacturers, and instead must outsource production of their CPGs to specialized companies that have the experience, know-how and equipment to make CPGs at the volumes/scale needed for major retailers and in compliance with federal food safety regualtions.
This is a non-trivial task. “If you’re [a store brand] trying to find a manufacturer for a new line of protein powder or coconut milk, you need them to be certified in the right processes,” noted Hanrahan.
“To find them you’ve traditionally had to go to trade shows, go to brokers, visit the factories, send a bunch of email back and forth to figure out if they can actually do what you want. And that slows product development down.”
Instead, Keychain is designed to be a one-stop shop connecting store brands with CPG manufacturers and vice versa — like Angi, it is a win-win offering: the stores get to browse and access the manufacturers they need for their specific product, and the manufacturers get access to customers. Keychain is already launching with 10,000 manufacturers listed on its platform.
This, Hanrahan and his co-founders believe, can actually significantly speed up the product development pipeline, letting stores put new products on shelves faster, and giving manufacturers more business in a shorter timeframe.
“it can take six to nine months to get something onto the shelf and we think we can cut that down by between 25 to 50 percent,” Hanrahan told VentureBeat.
Keychain’s value proposition is not necessarily in keeping with the current tech boom and hype around generative AI.
But the company is leveraging more “traditional AI”, and has aspirations to offer a possible generative AI experience in the future — say, a brand typing to a chatbot their specific product requirements and having it surface a list of possible manufacturers that fit the criteria.
In the meantime, Hanrahan was adamant in stressing that machine learning (ML) and data science are at the core of the current offering.
“This product would be prohibitively expensive to build without AI,” Hanrahan told VentureBeat. “Without the use of AI in collating, cataloging, and researching all of the millions of products needed to make this comprehensive, and comb through the vast amounts of internal proprietary and external data, it would be prohibitively expensive, frankly, to build this product. So it’s a really important part of what powers Keychain.”
Redemption on aisle 3?
Hanrahan co-founded the new venture with fellow tech entrepreneur Umang Dua — the duo’s second act, after co-founding cleaner booking service Handy, which was acquired by Angi in 2018 — and they were joined by Jordan Weitz, a private equity leader and venture capitalist who has extensive experience in CPG.
Hanarahan stepped down from his leadership post atop Angi a little more than a year ago following a sudden collapse in valuation, but he believes there is a ripe opportunity for disruption of the CPG market, and his backers agree.
“We love what the team is building at Keychain,” said Raviraj Jain, Partner at Lightspeed Venture Partners, in a statement. “They’re tackling a thorny, real-world problem with smart technology and a deep understanding of how to build a marketplace. Lightspeed is proud to lead Keychain’s seed financing and support them on their mission to create a more efficient, accessible supply chain for packaged goods.”
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