Dive Brief:

• Boston-based machine-learning analytics firm Celect said Thursday that it has garnered $5 million in Series A funding led by August Capital with participation by Activant Capital Group. 

• Celect was founded two years ago by two Massachusetts Institute of Technology professors, Vivek Farias and Devavrat Shah, who call their algorithms a “technological breakthrough in machine learning, which allows retailers to truly understand their customers’ buying patterns.”

• Celect says it can help retailers boost online sales by 20% and in-store sales by 7% through its analysis of transactions with customers and its determination of a retailer’s optimal merchandise assortment.

Dive Insight:

Welcome to the new wave in analytics, which some call “lean retail,” that is able to dig more deeply into a retailer's information to come up with more meaningful and more useful results. If successful, the new technology could help retailers avoid over-stocking or running out of merchandise by garnering real-time information on what customers think is trendy and cool. 

“Celect is fundamentally changing how some of the world’s largest retailers stock their shelves,” August Capital’s Vivek Mehra said in a statement. “The underlying technology powering Celect is capable of revolutionizing the retail industry and August is thrilled to be an early supporter.”

Celect says it will use the funding to grow its management and development teams and expand its headquarters.