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10/04/2021

Gap Inc. acquires artificial intelligence start-up CB4

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture
Gap Inc. is making another major technology investment.

Gap Inc. is continuing its focus on technology investments.

The specialty retailer has acquired Context-Based 4 Casting Ltd. (CB4), a New York- and Tel Aviv-based retail artificial intelligence and machine learning platform. The start-up provides technology that is intended to increase sales and improve customer experience through predictive analytics and demand sensing.

As part of the acquisition, CB4’s team will join Gap Inc. as full-time employees. The deal was brokered by Gap strategic growth office, which seeks out opportunities to fuel growth and accelerate new capabilities across its portfolio of brands.

“We believe artificial intelligence and machine learning will shape the future of our industry,” said Sally Gilligan, chief growth transformation officer, and head of the strategic growth office at Gap Inc. “Gap Inc. has experience working with CB4’s world-class data scientists, so we understand the impact and the wide applications their science can have across sales, inventory and consumer insights, as well as its potential to unlock value and enhance the customer experience,”

Funded by investors including Sequoia Capital, CB4’s technology has been implemented by retailers including Levi’s, Urban Outfitters, Lidl, and Kum & Go.

[Read more: Kum & Go keeps products on the shelves]

Since moving to the cloud in October 2020, Gap Inc. has increased investments in leading-edge technology. This includes investing over $100 million in supply chain infrastructure, including best-in-class fulfillment technology and automation. In August 2021, Gap acquired Drapr, a startup that enables customers to create 3D avatars and virtually try on clothing, on the heels of a new initiative at its Old Navy banner called “Bodequality,” which offers every one of its women’s styles, in every size, with no price difference.

Gap also participated in the latest funding round for digital fitness platform Obe Fitness, which has an existing partnership to provide digital fitness content and services via Gap’s Athleta brand.

In addition, Gap has been deploying artificial intelligence (AI) solutions and robotic technologies in its fulfillment centers – both creating more processing power and more automation. In March the company, which already leverages Kindred Sort robots to pick online orders in its U.S. distribution centers, contracted with systems integrator Advanced Handling Systems (AHS) to design and integrate an Exotec Skypod System to optimize its returns picking process.

However, by acquiring CB4, which ia already in use by several major retailers, Gap may be showing ambitions of becoming a full-fledged tech platform. An increasing number of retailers – including (but not limited to) Instacart, Walmart, Target, and Kroger - have recently shown signs of wanting to evolve into broadly-based tech platforms such as Amazon, Apple, Google and Facebook.

“CB4’s AI helps lift sales and enhance customer experiences,” said CB4 CEO Yoni Benshaul. “As we join Gap Inc., I’m excited to see how our team can drive even broader and deeper impact at the company’s global scale.”