In the current online and in-store technology race to help consumers get a better fit and simultaneously assist retailers in lowering their return costs from their customers’ ill-fitting online orders, Boston-based NetVirta thinks it has a leg, and an arm, up other rivals in the space. Pun intended.
Co-founded eight years ago by two Massachusetts Institute of Technology (MIT) graduates, Jeff Chen and Andy Eow, NetVirta started its business in the medical space with a smartphone technology application for 3-D body scanning. With that technological know-how, the app landed Class II approval from the Food and Drug Administration in the U.S. shortly afterward. Today, NetVirta’s inaugural Curve Capture medical app, which entered the medical market in 2013, is widely used by thousands of clinicians in 13+ countries to 3D scan patients for custom-fit orthoses and prostheses. Four years later, in 2017, the company expanded its scope by entering the sports protective market by using its scan technology to help build custom-fit American football helmets for collegiate and professional (NFL) teams.
Since 2019, CEO Chen, who holds a Ph.D. in electrical engineering from MIT and five patents, has been working to connect NetVirta’s technology with the footwear and apparel brands across Europe, the U.S., Japan and China. After working behind the scenes with several major fashion brands to perfect its solution, the company released the world’s first consumer-facing 3D scanning app with close-to-medical precision, Verifyt, in 2021.
How have you funded NetVirta over the past eight years?
Jeff Chen: We support ourselves mainly from our product sales or SaaS service sales. We make about $3 to $4 million a year from the medical, sports and fashion industries. We only raised funds in one round in 2017 before we decided to expand into the fashion space. We raised money from a few family offices in the U.S. and Singapore. Of course, we are always open to additional great investors joining us in this exciting journey.
What was behind the decision to enter the footwear and apparel space?
So, the problem we’re trying to solve for our fashion apparel and fashion footwear clients is helping them to reduce online returns. Usually, the online return rates are somewhere around 35 percent, depending on the brand. And we’re also helping them [the brands] to increase conversions.
We have a mobile solution that helps consumers conduct 3D scanning at home. And a size recommendation engine on the back end that is based on the SKU number of the product. Essentially, we’re saying that within the same brand, if you look at different pairs of shoes, say tennis and volleyball, you may see yourself having different size recommendation results from our engine.
Our technology platform is really the world’s only FDA [U.S. Food and Drug Administration] cleared. We are proud to claim near-medical accuracy for our consumer-facing products, and we are the only company that offers both full-body scanning and foot scanning from the mobile platform.
What about Verifyt’s relationship with brands, retailers, and consumers today?
We offer a complete solution platform – foot, body, and head scanning. And there are three elements for the technical solution – mobile, web plug (a few lines of JavaScript codes that can plug into a client’s e-commerce site) and the backend size recommendation engine.
How much data and time are needed to demonstrate the cost savings that 3D scanning can offer brands?
I think it will take a year and a half to collect enough data to prove in the application how much the return rate is decreased and how much the conversion rate is increased with the technology. We did quite a few pilots with clients before they signed long-term contracts. The data looks very promising. I think we’ve seen as high as a 60 percent reduction in returns. So that’s very encouraging in terms of converting millions and millions of dollars into cost savings.
How many brand and company relationships do you currently have?
We have nine large fashion brands that have signed long-term contracts for our service. Each one of them has over $1 billion in market capitalization. We have released our first footwear product, [Merrell], as part of the Wolverine Worldwide contract. We expect to release two more fashion brands in the luxury space this year. And we’re also expecting to release our product with two more footwear brands in 2022. One is a well-known European brand, the other a well-known Japanese company.
What might be the most challenging thing for apparel and footwear consumers to understand about 3D scanning? When might we see more widespread consumer utilization of your 3D scanning app?
I think across all the tests and focus groups we have conducted, we’ve seen overwhelming positive opinions regarding 3D scanning of the body and foot shape and buying something online that fits the consumer. I think the modern generation appreciates deep technology and using high tech to solve everyday problems. In our opinion, consumers are ready.
You have talked about the concept of perhaps a “scanning room” in addition to the traditional fitting room in brick-and-mortar retailers. Do you see this concept on the horizon anytime soon?
Before the pandemic, our customers were talking about putting equal emphasis on in-store and at-home solutions. But that has changed. I think all of us [in the technology fit space] are making a conscious decision to roll out the at-home application first and then decide when to introduce the in-store solution. For the full-body scan, our in-store solution is quite straightforward. Essentially, we’re going to install our full-body scanning app into a larger device like an iPad and attach it to one of the fitting room walls. And of course, we can’t call it a fitting room anymore because it has cameras in it. It means consumers can go to the scanning room and conduct the 3D scan themselves. We also have a hardware foot scanning device with patents on it, a hybrid of our medical scanning device with medical accuracy. But at the same time, it costs less, less than $1,000 per unit. So, it’s really an inexpensive, super-accurate device we offer.
Thank you!
