According to Gartner, Inc., by 2027, half of all companies managing warehouses will have adopted AI-driven vision technologies, moving away from conventional scanning methods for cycle counting.
San Francisco-based Kargo has closed an $18.4 million funding round as the company continues its push to bring artificial intelligence into America’s warehouses and distribution centers.
The round was led by Matter Venture Partners, with backing from returning investors Sozo Ventures and Founders Fund. What’s particularly noteworthy is the participation of two major customers food storage giant Lineage and supply chain provider Armada, who doubled down on their relationship with the startup by becoming investors.
That customer confidence appears well-founded. Kargo has already deployed its computer vision systems across 240 dock doors at Armada facilities, helping automate inventory tracking for the food distributor’s nationwide network. The technology uses AI-powered cameras to scan freight labels, count cases, and spot damaged goods in real time.
The results speak for themselves as Kargo now serves 25 customers including household names like Tyson Foods and Tillamook, processing roughly $200 million worth of inventory daily. The company manages over 500 active installations and has achieved a 215% net revenue retention rate meaning existing customers are rapidly expanding their use of the platform.
“We were live in under a month,” said Rick Rover, who heads Armada’s warehouse operations. “Our restaurant clients saw benefits almost immediately from the increased accuracy.”
Kargo’s approach centers on what founder Sam Lurye calls “visual proof” of warehouse operations. The company’s tower systems install at loading docks to capture images of every pallet, while their newer Kargo Lift product mounts directly onto forklifts to extend monitoring throughout the warehouse floor.
The forklift-mounted system represents Kargo’s latest innovation, featuring an 80-megapixel camera array that can read barcodes and assess product condition with 99.9% accuracy. The device mounts strategically on the forklift’s cross-beam, staying out of operators’ sight lines while capturing detailed footage of every pallet movement. When issues arise whether missing items, damage, or incorrect products operators receive instant alerts on a dashboard screen, allowing them to address problems before they cascade into costly mistakes.
For an industry still heavily reliant on clipboards and manual counting, the promise of automated verification holds significant appeal. Warehouses lose billions annually to inventory discrepancies, and labor shortages have made traditional quality control methods increasingly difficult to maintain. Beyond cost savings, the technology addresses safety concerns by automatically detecting potential hazards and providing video documentation that can be used for training and compliance purposes.
The company’s rapid deployment timeline of 47 days from contract signing to go-live has proven crucial for customer adoption. The systems require no modifications to existing warehouse infrastructure, drawing power directly from forklifts and connecting to standard Wi-Fi networks. Installation takes less than an hour per unit, avoiding the complexity that often derails technology rollouts in industrial settings.
“Comprehensive data is the key to unlocking AI’s potential,” said Lurye. “We’re helping customers build their AI stack to connect warehouses with back offices and customers.”
The fresh capital will fund product development and customer expansion as Kargo looks to establish itself as the standard for warehouse visibility. With supply chains under increasing pressure to improve efficiency and accuracy, the timing appears right for AI solutions that can deliver measurable results without operational disruption.
For investors, Kargo represents a bet on the practical application of computer vision technology in an industry ripe for modernization. As Haomiao Huang from Matter Venture Partners put it, the company is “building the modern infrastructure layer for the physical economy.”
