Amazon venture fund backs startup developing fix for return fraud
Packages ride on a conveyor belt during Cyber Monday at an Amazon fulfillment center on December 2, 2024 in Orlando, Florida.
Miguel J. Rodriguez Carrillo | Getty Images
Amazon is turning to the startup world to find a potential fix for one of its thorniest logistics problems.
Retailers of all sizes have in recent years struggled with an uptick in fraudulent returns. The scam involves shoppers requesting a refund, but instead of returning the merchandise, they keep the item and send back an empty package or a box of unrelated junk.
It’s become a costly nuisance for retailers, accounting for $103 billion in losses last year, according to Appriss Retail.
Cambridge Terahertz, a Sunnyvale, California-based startup, has developed a 3D imaging system that can see inside unopened packages, enabling retailers to more easily and quickly spot cases of return fraud.
The company has just closed a $12 million seed financing, led by venture firm Felicis, with participation from Amazon’s $1 billion Industrial Innovation Fund and other investors.
“Amazon handles a lot of boxes, as you can imagine,” Nathan Monroe, CEO of Cambridge Terahertz, said in an interview. “It’s a big problem just knowing what’s inside boxes, knowing how efficiently they’re packed, knowing if what you’ve returned to them is what you said it is.”
Amazon launched the Industrial Innovation Fund in 2022 with a goal of investing in businesses working on technology solutions that could apply to the company’s massive and complex operations network, from the middle mile to the last-mile portion of the delivery process.
Franziska Bossart, head of the fund, said in an interview that Amazon will typically plan to pursue a deeper “commercial relationship” with portfolio companies over time, ranging from piloting the technology to a potential acquisition.
Cambridge’s technology “aligns well with Amazon’s needs” and can have a real impact on its ability to screen inventory for damages and defects once it’s returned or before a package leaves the warehouse.
“The ability to see into boxes, identify contents, along with the compact nature of the system could allow for integration at various points in our operations,” Bossart said.
The fund has backed 20 companies so far. It also sourced Amazon’s acquihire and licensing deal with artificial intelligence robotics startup Covariant last August, Bossart added.
Amazon’s investment track record has come under scrutiny in the past. A 2020 investigation from The Wall Street Journal found the company’s Alexa Fund, which primarily invests in voice and AI technologies, used privileged information gained during meetings to launch its own competing products, citing people and startups familiar with the situation. Amazon previously denied any wrongdoing.
One of the Alexa Fund’s most notable investments was in video doorbell maker Ring, which Amazon later acquired in 2018 for $1 billion.
Cambridge connected with Amazon last year through a pitch competition focused on packaging visibility. Monroe co-founded the company in 2023 after researching terahertz imaging at the Massachusetts Institute of Technology.
The company, which has 10 employees, says it shrunk airport-scale security scanners down to a chip-based system inside a pyramid-shaped device that can fit in your hand. The device was originally conceived as a way to detect concealed weapons by seeing through nonconducive materials, like clothing or packages, in an unobtrusive way.
Cambridge cofounders Nathan Monroe and Anand Dixit hold a custom chip and pyramid-shaped device that make up its 3D imaging system.
Cambridge Terahertz
Cambridge said it has since been approached by companies interested in how the technology can be used in supply chains, manufacturing, aerospace and medical applications.
The startup said it has secured four government contracts, and has had discussions with U.S. Customs and Border Protection around how the technology can be used to detect shipments of fentanyl at the border, a problem the Trump administration has zeroed in on through its crackdown on a near century-old trade loophole known as de minimis.
The capital from Amazon and others will enable Cambridge to ramp up hiring and “fully productize” its 3D imaging technology, Monroe said.
WATCH: Amazon weighs another multi-billion dollar investment in Anthropic
Meta CEO Mark Zuckerberg makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta CEO Mark Zuckerberg on Friday said Shengjia Zhao, the co-creator of OpenAI’s ChatGPT, will serve as the chief scientist of Meta Superintelligence Labs.
Zuckerberg has been on a multibillion-dollar artificial intelligence hiring blitz in recent weeks, highlighted by a $14 billion investment in Scale AI. In June, Zuckerberg announced a new organization called Meta Superintelligence Labs that’s made up of top AI researchers and engineers.
Zhao’s name was listed among other new hires in the June memo, but Zuckerberg said Friday that Zhao co-founded the lab and “has been our lead scientist from day one.” Zhao will work directly with Zuckerberg and Alexandr Wang, the former CEO of Scale AI who is acting as Meta’s chief AI officer.
“Shengjia has already pioneered several breakthroughs including a new scaling paradigm and distinguished himself as a leader in the field,” Zuckerberg wrote in a social media post. “I’m looking forward to working closely with him to advance his scientific vision.”
In addition to co-creating ChatGPT, Zhao helped build OpenAI’s GPT-4, mini models, 4.1 and o3, and he previously led synthetic data at OpenAI, according to Zuckerberg’s June memo.
Meta Superintelligence Labs will be where employees work on foundation models such as the open-source Llama family of AI models, products and Fundamental Artificial Intelligence Research projects.
The social media company will invest “hundreds of billions of dollars” into AI compute infrastructure, Zuckerberg said earlier this month.
“The next few years are going to be very exciting!” Zuckerberg wrote Friday.
WATCH: Meta announces massive ‘Prometheus’ & ‘Hyperion’ data center plans
Technology
Palantir joins list of 20 most valuable U.S. companies, with stock more than doubling in 2025
Alex Karp, CEO of Palantir Technologies, speaks on a panel titled Power, Purpose, and the New American Century at the Hill and Valley Forum at the U.S. Capitol on April 30, 2025 in Washington, DC.
Kevin Dietsch | Getty Images
Palantir has hit another major milestone in its meteoric stock rise. It’s now one of the 20 most valuable U.S. companies.
The provider of software and data analytics technology to defense agencies saw its stock rise more than 2% on Friday to another record, lifting the company’s market cap to $375 billion, which puts it ahead of Home Depot and Procter & Gamble. The company’s market value was already higher than Bank of America and Coca-Cola.
Palantir has more than doubled in value this year as investors ramp up bets on the company’s artificial intelligence business and closer ties to the U.S. government. Since its founding in 2003 by Peter Thiel, CEO Alex Karp and others, the company has steadily accrued a growing list of customers.
Revenue in Palantir’s U.S. government business increased 45% to $373 million in its most recent quarter, while total sales rose 39% to $884 million. The company next reports results on Aug. 4.
Earlier this year, Palantir soared ahead of Salesforce, IBM and Cisco into the top 10 U.S. tech companies by market cap.
Buying the stock at these levels requires investors to pay hefty multiples. Palantir currently trades for 273 times forward earnings, according to FactSet. The only other company in the top 20 with a triple-digit ratio is Tesla at 175.
With $3.1 billion in total revenue over the past year, Palantir is a fraction the size of the next smallest company by sales among the top 20 by market cap. Mastercard, which is valued at $518 billion, is closest with sales over the past four quarters of roughly $29 billion.
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