What’s next for Aldi’s checkout-free dreams?

It’s been almost a year since German discount grocer Aldi launched a pilot program to test checkout-free technology that resembled Amazon’s Just Walk Out technology, but while it’s unclear whether the retailer plans to continue pursuing the tech, one thing is certain — it won’t be with Berkeley, Calif.-based tech company Grabango. 

Grabango, which provided the tech for Aldi’s pilot program in the Chicago suburb of Aurora, Ill., confirmed on Thursday that it has permanently discontinued operations. 

“Although the company established itself as a leader in checkout-free technology, it was not able to secure the funding it needed to continue providing service to its clients,” a company spokesperson said. “The company would like to thank its employees, investors, and clients for all their hard work and dedication. The decision was an extremely difficult one to make.”

Grabango raised just over $73 million in its lifetime, according to a CNBC report, with its most sizable financing round coming in 2021. In June of that year, Grabango announced that it had raised $39 million in a round led by Commerce Ventures, with participation from Peter Thiel’s Founders Fund, Unilever Ventures, Honeywell Ventures, and WIND Ventures.

An Aldi spokesperson could not immediately be reached for comment. The no-frills discount grocer operates 2,414 stores in the U.S., as of Sept. 17, according to ScrapeHero.com.

The Aldi checkout-free test store, which deployed Grabango’s technology, allowed shoppers to download the Grabango app, connect it to their debit or credit card, place items in their cart, and then pay by scanning a single QR code in the checkout area. 

Grabango’s network of small cameras throughout the store used artificial intelligence to record the items placed in the basket for purchase. Those items were then automatically added to the shoppers total.  

Supermarket News visited the store in early February to test the checkout-free tech. Setting up the app took about five minutes, and the small test basket purchased was flawlessly charged to the account. At the front of the store, Aldi promoted the program with signage that read “Checkout just got faster.” and encouraging shoppers to download the app. 

Aldi and Grabango tested the tech for several months before publicly announcing the partnership in mid-April.

“It’s exciting to see a checkout-free capability live in one of our stores,” said Eric Traxler, vice president of IT at Aldi, when the partnership was announced. “Aldi is continuously looking for new ways to be innovative and provide a best-in-class experience for our shoppers, and Aldigo is a great example of that in action.”

Supermarket News interviewed Grabango founder and CEO Will Glaser after the test pilot was announced, and roughly a month after Amazon, which pioneered checkout-free technology, announced it was moving away from its own “Just Walk Out” tech. 

Amazon’s departure from the field appeared to give Grabango an edge in the market, and Glaser explained that checkout-free tech would “soon be everywhere.”

Grabango appeared to have a functional program and a solid foothold in the industry — its two biggest customers were convenience-store chains 7-Eleven and Circle K. Other major retail partners have included Chevron, bp, MAPCO and GetGo.

Glaser told Supermarket News in April that Grabango tech was more flexible and less expensive to operate than Amazon’s checkout-free tech. That’s because “Just Walk Out” tech relied on shelf-sensors and cameras with computer vision to track customer purchases. 

That made it difficult for Amazon to retrofit existing stores with the technology, as well as rearrange items on the shelves once the system is in place, Glaser said. Grabango’s setup relied solely on AI-powered cameras. 

Glaser gave an optimistic outlook for Grabango in April, predicting that deployment at Aldi would catapult the technology into the grocery retail mainstream. 

“My view is that change is coming really quickly, like email and smartphones, and ATMs, and Uber, and text messaging, all these things that we now take for granted,” he said in April. “Checkout-free will soon be everywhere as well, and then we'll be able to talk to our kids about well, you know what I used to wait in lines and strangers used to handle all my food and telephones were tied to the wall with a cord.”