Alpine Investors’ ASG bets on software to help retailers reduce shrinkage

ThinkLP marks Alpine Software Group's 50th acquisition since 2016.

Retailers have been beseiged by challenges over the last several years, as consumers shop increasingly online for several reasons, including fear of crime. Later this morning, Alpine Investors’ portfolio company Alpine Software Group (ASG) is expected to unveil the acquisition of ThinkLP, a Waterloo, Ontario-based provider of software designed to reduce inventory “shrinkage” (an accounting term used to describe when a store has fewer items in stock than in its recorded book inventory due to theft and other factors).

The deal marks the 50th acquisition for ASG since 2016. Specializing in Software-as-a-Service, the Walnut Creek, California-based business has acquired companies across 10 verticals with 17 distinct companies, partnering with more than 70 founders.

Shrinkage has been one of the pain points for the retail industry, as billions of dollars in inventory are lost annually, according to the National Retail Federation. During holiday seasons, video evidence of thieves breaking into shops motivated many stakeholders, including the NRF, the US Congress and law enforcement agencies, to push for ways to reduce these crimes.

Steve Reardon, Mark Strauch, Alpine Software Group

Alpine co-founding partner Mark Strauch, who co-leads the software and tech-enabled services vertical at the San Francisco PE firm and serves as chairman of ASG, and Steve Reardon, the CEO of ASG, said that the ThinkLP deal came at the right time.

Founded by Doug Treleaven in 2013, ThinkLP provides loss prevention software for retailers, helping them manage incidents, conduct audits, and reduce inventory shrink with AI-powered analytics that identify patterns to help them prevent future incidents.

In an industry in which margins are constrained because of the hyper-competitive environment they operate in, Reardon said retailers are looking at every part of the supply chain to minimize shrinkage and improve efficiency, and software has proven effective.

“Shrinkage will always be an issue, but the customers that have implemented this product have seen a very real reduction in loss,” Strauch said.

“ThinkLP is deeply embedded in our customers’ workflow,” Reardon said. “It’s providing a solution to a growing and emergent problem that retailers are facing all over the world, and it’s a business that is not only potentially defensible in a downturn, but it often actually grows in a downturn.”

ASG is planning to grow ThinkLP’s marketing as sales departments, among other organic growth methods, aiming to triple the business.

ThinkLP marks ASG’s inaugural investment in retail loss prevention, but the company is planning add-ons.

Said Strauch: “Our ability to provide capital provides another layer of comfort and security, to not just grow organically, but to do acquisitions that they have always wanted to do but lacked the capital to execute on.”