Crushing crime — our investment in Auror
Crime (broadly) is a crippling social and economic problem, which society has ultimately come to accept and minimise in the absence of an inability to eliminate it.
In retail and online environments, theft is an accepted cost of doing business. Theft is factored into standard operating practice, it is an economic reality, its equated into budgeting and forecasts, staff are even taught about minimising and reporting theft before learning about the products they’re selling.
Theft is essentially categorised into two motivations, serious and planned, or opportunistic. And for police forces, the size of a theft directly impacts its likelihood of being solved. Even if smaller crimes are connected to one or more people, the smaller the crime — the lower the chance of it being solved.
To understand the scale of the problem, in Australia alone, organised and planned retail theft is a $3.6Bn+ problem, roughly 2–3% of retail turnover. Woolworths and Coles supermarkets for example, report shrinkage of over $800M per year, of which about ~$500M is theft.
These losses from theft are equal to 30% of total retail profits - 30% of all the profit from food, liquor, clothing, equipment, furniture, building materials, fuel, white goods and wholesaling - theft is a tax on consumption.
However, for Woolworths and Coles, theft is not just a $500M profit problem, it is an $9.8Bn revenue problem. Because in order to ‘find’ $500M of lost profit, these companies need to either generate $500M of savings, or find an additional $9.8Bn of revenue — equating to a a 30% top-line increase and +10% of extra market share - Impossible!
But what if the theft ‘acceptance-equation’ could change? What if technology could reduce theft, lower the impact of crime, lower the cost of solving crime, and achieve that using software and data?
It can...
Auror (pronounced Ora) is a crime prevention SaaS company founded in NZ by Phil Thompson, Tom Batterbury and James Corbett. Auror’s innovative software is developing a networked database of serious and organised crime, criminal offenders and their vehicles. It is shedding light on criminal patterns in real time, and dramatically lowering the cost of crime prevention.
Folklore has led the company’s latest investment round alongside Reinventure, which is backed by Westpac Bank, and prominent NZ tech founders.
Auror’s customers are large retail groups and police forces, and it’s strong revenue growth and customer success points to a very bright future for the company.
One-third of all reported crime is theft-related, with crimes against businesses such as shoplifting, costing the economy millions of dollars every day. Yet most crimes remain ‘unsolved’ because each offence is usually too small to prosecute, or is undertaken in separate geographical areas making the cost of an investigation by traditional methods prohibitively high — until now.
The Auror platform breaks down the barriers between individual crimes, by building a complete picture of the relationships between multiple offences, multiple offenders, and their various vehicles. Auror’s solution identifies and networks offender data by using CCTV, image and character recognition software and in-retailer reporting software. The technology surfaces crimes occurring in real-time, compiles reports on each offence, provides a communication channel between the police and loss-prevention teams within retailers and alerts those retailers when known offenders arrive at any retail premises. The system is currently averting more than 10,000 offences per month and has resulted in almost 4,000 convictions.
An example of Auror’s success can be read about in this article below. Auror’s platform cracked a $300,000+ baby formula theft ring for a leading Australian food retailer in conjunction with the Victorian Police in its first two weeks: Police Seize Stockpiles of Allegedly Stolen Baby Formula
Beyond catching serious criminals, Auror has a broader social benefit of lowing the social impact of crime. The tech allows the police to identify and intercept early criminal patterns, before offenders scale the seriousness of their activities to multiple offences. This means the police have the opportunity to intervene and deter early, before someone wrecks their life committing crime, resulting in a cascade of issues for their family and society more broadly.
Auror is a unique startup helping companies to dramatically reduce their losses, increase profitability and make workplaces safer. Moreover, the flow-on social benefits emerging from Auror’s success will lead to better outcomes for business, the police, governments and the general public.
We are very excited about what the future holds for the company and our investment.