Simon Molnar raises $6m to expand retail start-up Flagship

Simon Molnar has raised $5.9m to expand his retail start-up into the US after nabbing major retailers including R.M. Williams as a customer.

Flagship founder Simon Molnar.

The younger brother of Afterpay founder Nick Molnar has raised around $US3.8m ($5.9m) to expand his retail start-up into the US after nabbing major retailers including R.M. Williams as customers.

Simon Molnar, 33, has developed a business that digitally replicates retail stores and tracks which areas generate the most income, providing data that he says can help move old stock, push sales and get greater visibility over product.

Its data is so granular that Flagship can work out the value of a mannequin in a window and compare that across a network of retail stores.

“Our whole thesis is bringing eCommerce-level metrics into bricks and mortar retail,” Mr Molnar told The Australian.

Flagship has just closed a near $US3.8m seed round to get its product into the hands of major US retailers, with the likes of Walmart and Target in its sights. The round was led by Coreline and Veridical Ventures and included participation from Macdoch Ventures and Tidal Ventures, the Sydney-based VC firm which led the start-ups first $2m capital raise in September 2023.

Flagship will use the new funding to hire more staff and expand its presence on the ground in the US, where Mr Molnar just moved his young family to Los Angeles.

Flagship founder Simon Molnar.

Afterpay co-founder Nick Molnar.

Over the past few months, Mr Molnar has mustered up talks with Walmart and Target and is set to begin a pilot with a 400 store apparel brand who are part of a larger retail network with 2000 stores, he said.

In Australia, it has already nabbed several major national franchises since its launch last year including Peter Alexander, Assembly Label, Jo Mercer, Stylerunner, VENROY, SIR and R.M. Williams.

Mr Molnar founded the business after he spent several years working across data and marketing departments at his brother’s buy now, pay alter giant Afterpay.

After the birth of his first daughter in 2020, he undertook some eCommerce consulting work during paternity leave with leisure clothing brand Venroy – which later became Flagship’s first customer.

One of the major struggles he found was that retail stores couldn’t determine what kind of tactics helped improve sales – and that the data they held was minor in comparison to the mountains eCommerce brands were able to collect online.

At first, he tried his hand at fitting bluetooth tracking devices in coathangers with the help of an Israeli firm, but soon realised it was too costly and took too long to set up. So he turned to software.

Flagship relies on staff members uploading photos of the layout of their store, which are later cross-examined alongside sales.

National franchises soon got on board with the idea, discovering that they didn’t need to copy and paste the layout of their popular stories and could now make changes based on real data.

Mr Molnar admits he was able to lean on some of the relationships he’d formed while working at Afterpay to test early models of the platform. Some of them later became customers. That’s how he got in with R.M. Williams.

While he describes himself as “highly competitive”, Mr Molnar said, “there’s no chip on my shoulder” about his highly successful brother Nick, who sold Afterpay to Jack Dorsey’s Block for $39bn in 2021.

“The way that I look at my brother is, I’m not in competition with him; it’s my brother and I in competition with the world. I’m super, super competitive, but my brother is the one person I’m not competing with,” he said.

Mr Molnar said he’d counted out Block as a potential investor and saw his more aligned with marketing tech rather than fintech.

Originally published as Simon Molnar raises $6m to expand retail start-up Flagship