Having realised the incredible savings made from the mass-adoption of self-service checkouts, Woolworths (ASX: WOW) could soon have an array of other automation-driven initiatives having secured the controlling interest of data science company Quantium for $223 million.
The investment will increase Woolworth’s existing shareholding from 47% to 75% following a hugely successful partnership where Quantium’s data science has been integral to the success of the national retailer in recent years.
Initially investing $20 million for 50% of Quantium in 2013, the data analytics company has increased its valuation from $40m at the time to now be valued at $826m based on today’s investment from the supermarket giant.
“We have long admired the Quantium business,” said Woolworths Chairman, Gordon Cairns.
“We have enjoyed a successful partnership with them over the last eight years by jointly developing products and services that provide critical insights to both Woolworths Group and our suppliers, helping us put our customers first in our decision making.”
Securing the majority shareholding, Quantium’s Woolworth-dedicated business will be named Q-Retail and be integrated into the Woolworths Group. The business will be run by Amitabh Mall as Managing Director who will also be appointed Chief Analytics Officer of Woolworths Group.
While Q-Retail services Woolworths, Quantium will retain its existing clientele in the FMCG, Banking, Insurance, Consumer Services, Property, Health and Government verticals under confidentiality agreements where their data science is employed to make customer-first decisions across pricing, ranging and promotions.
“Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers,” said Woolworths CEO Brad Banducci who will also assume the role of Chairman at Quantium.
“The way we gather data, interpret it, and protect it, is becoming ever more important. Through this transaction, we aspire to bring together Quantium’s advanced analytics capability and Woolworths Group’s retail capabilities to unlock value across our entire retail ecosystem.”
Settlement of the transaction is expected to be completed prior to the end of FY21. Financials relating to Quantium’s activities were not disclosed.