Fuel, Food, and the Future of AI

Over 80% of the US population lives within a 10 minute drive to a convenience store. An estimated 150,000+ stores in the US generate more than $800 billion annually.  Even more staggering is that nearly 80% of all fuel purchased in the country flows through convenience stores.

Yet, for all that scale, the customer experience remains fragmented. There is a disconnect between fueling up at the gas station and shopping in the store resulting in inefficiencies, missed revenue, and consumer frustration.  This creates an enormous opportunity to use technology to reimagine the customer experience – at the pump, in the store, and across digital channels.

Shyam Rao knows this terrain well. Cervin had the pleasure of working with him on his previous startup Punchh, an engagement platform for restaurants, groceries, retailers, and convenience stores acquired by PAR Technologies for $500M. He approached us in early 2023 with an idea of revolutionizing the retail experience using emerging AI models.  Shyam’s track record, having delivered significant value to Cervin previously, and relevant domain experience was a thrilling opportunity  for us. We are glad to be partners in the building of Tote.ai.

With the recent announcement of Tote.ai we thought we would take the opportunity to discuss with Shyam on how he and his team are planning to take something as routine as pumping gas and grabbing snacks into a proving ground for AI innovation:

Shyam, when you originally talked to us about Tote, you were exploring a broader retail point of sale opportunity.  Walk us through how you landed on fuel and convenience retail specifically. What did you learn from your early design partners that made you focus on this particular area?

We started broad, but fuel and convenience retail kept pulling us back. Here's an industry generating over $800 billion annually, with 46% of Americans visiting weekly, yet the technology powering these stores hadn't fundamentally evolved in decades.

What really crystallized our focus was talking to operators who were genuinely frustrated. They would tell us about wanting to launch a simple loyalty program and being quoted six-figure implementation fees and 18-month timelines. Or marketing directors who had great campaign ideas but couldn't execute them because their POS vendor would take months just to add a promotional button.

The more we dug in, the more we realized fuel and convenience has this unique challenge that no other retail segment faces: you have to seamlessly bridge two completely different experiences – the forecourt where customers fuel up, and the in-store environment where the real margins are made. Legacy systems treat these as separate worlds. We saw an opportunity to unify them with AI and modern architecture. Our early design partners confirmed what we suspected – they weren't just looking for a technology refresh, they wanted to fundamentally reimagine what customer engagement could look like from pump to checkout.

Our goal is to own the c-store market. With our differentiated solution, we think we can serve the vast majority of the c-store market. Once we accomplish that, we will continue our mission to transform customer journeys in the physical retail space across other market segments. 

Why is now the right time for this transformation in fuel and convenience retail? What’s changed in the market or technology landscape?

Three things converged to create this moment. 

First, AI reached a tipping point where it can actually solve real business problems, not just automate back-office tasks. We can now deliver personalized recommendations in real-time, provide multilingual support to associates, and create experiences that were impossible even two years ago.

Second, the competitive pressure is intensifying. Quick Service Restaurants (QSRs) are expanding into convenience retail. Customer expectations for seamless, personalized experiences have significantly increased as they get used to them across various online and retail channels.

Third, the infrastructure is finally ready. Edge computing, better APIs, and event-driven architectures mean we can deploy AI directly in-store without the latency issues that plagued earlier attempts. We are not asking operators to rip out their existing hardware – we are making it work better with modern software on top.

The operators who move first are going to have a significant competitive advantage. They will be able to turn every customer touchpoint into a revenue opportunity.

How does the solution you’re developing unlock new revenue streams and does it also deliver cost-savings?

The Tote.ai platform is absolutely unlocking new revenue. Cost savings matter, but what excites our customers is growth. Operators can increase basket sizes by engaging customers from the pump, not just at the register. When you can recognize a customer at the forecourt and suggest they grab their usual coffee plus a breakfast sandwich before they even enter the store, that's incremental revenue that was never possible before.

Our "one customer, one cart" architecture creates persistent shopping experiences across all touchpoints. Customers can start shopping at the pump, add items via mobile, and complete their purchase at any terminal without rescanning. This seamless experience drives larger transactions and reduces abandonment.

The cost savings are real too — reducing training time with AI assistance, extending hardware life with our device cloud, eliminating vendor lock-in fees. Growth is, however, the primary driver.

Conceptually, “One Customer, One Cart” personalization as a core differentiator makes sense.  Can you dig deeper into the value proposition for convenience store operators? Why is it so hard for legacy providers to deliver this experience?

"One customer, one cart" means your shopping experience flows seamlessly from pump to mobile to register without breaking. It's the difference between treating each touchpoint as a separate transaction versus creating one unified journey.

Here's what it looks like: A customer taps their phone at the pump and our AI suggests their usual coffee plus a promotional breakfast item. They add both to their cart. Inside, they grab an energy drink and scan it at self-checkout, which automatically merges with their pump cart. At the register, the associate can instantly see the entire cart and complete the transaction. No rescanning, no starting over, no friction.

For operators, this drives measurable business results. Higher basket sizes because you're engaging customers earlier in their visit. Faster checkout because associates don't have to rebuild transactions. Better loyalty enrollment because the process is seamless and respects privacy.

Legacy providers can't deliver this. They are built on decades-old architecture that treats each device and interaction as isolated. They are trying to bolt modern experiences onto systems that were designed when "mobile devices" didn’t exist. We have built the platform from the ground up with an event-driven architecture that makes real-time synchronization possible.

Tote.ai has an AI component to the platform.  I can’t think of much that is further afield to AI than pumping gas and eating snacks.  How are you applying AI to drive business outcomes?

AI has massive potential here. We instrument every interaction in the customer journey and our AI leverages the data to create personalized experiences. Imagine your experience of buying a product online. Today’s digital technology collects all your interaction data to drive personalization, recommendations, and targeting/re-targeting. We are bringing the same thought process to customer journeys in the world of physical retail. The concept of digitizing physical retail has never been done before. We will be the first company to deliver on this vision. 

The industry deserves better technology, and we are dealing with problems that are perfect for AI solutions. High employee turnover means constant training needs. Diverse customers require multilingual support. Real-time inventory and promotion management is needed across multiple touchpoints. These can all be solved using AI.

Our Genie AI Assistant addresses the human capital challenge head-on. When an associate needs help with a policy question or task guidance, they get instant, contextual support in their preferred language. But here's what makes it truly AI-native: Genie doesn't just search static documentation. It queries live system data and understands each store's specific configuration. If an associate asks how to process a return, Genie can guide them through the exact workflow based on that store's actual POS setup and policies.For customers, AI enables real-time personalization at the forecourt and intelligent recommendations during checkout based on actual cart contents and purchase patterns.

The difference with "AI native" is fundamental. Legacy providers are bolting chatbots onto 20-year-old systems. It's cosmetic AI that looks intelligent but can't actually do much. We have built AI into our platform foundation. Our agents don't just retrieve information, they take actions through the same APIs the platform uses. They can query real-time data like pump status or inventory levels, and actually trigger workflows or restart devices when needed.

We are also building for an agentic future in which agents can collaborate amongst themselves and with humans. Today, it’s agents for training and support. Tomorrow, a compliance agent can handoff to an inventory agent. That's only possible when AI is woven into your architecture, not retrofitted onto it.

Convenience stores have fragmented, legacy hardware across their locations, some of which is fully depreciated. How would Tote handle this reality, without doing a “rip and replace”? 

Our software runs on existing Windows, Linux, iOS, and Android devices with a consistent interface. No forced hardware upgrades, no astronomical replacement costs. Our Device Cloud goes further by bringing modern management to mixed hardware environments. Whether you're running 10-year-old Windows terminals or new Android devices, operators get unified monitoring, configuration, and trouble-shooting from one dashboard. We are extending the life of existing hardware while preparing stores for future upgrades on their timeline, not ours.

This matters because convenience retail operates on thin margins. Forcing a $50,000 hardware refresh across hundreds of locations isn't just expensive — it's operationally disruptive. Our approach lets operators innovate with software while maintaining operational stability.

When they do upgrade hardware, whether for remodels or expansion, our platform supports whatever they choose. We are not locking them into specific hardware or vendors. We are providing operators control over their technology stack.

You are a repeat founder in this space. You have had a very successful exit with Punchh, having delivered significant value to all constituents. How does your previous experience inform your approach to building Tote.ai?

The biggest lesson from Punchh was the importance of solving real business problems, not just technical ones. When we started Punchh, loyalty programs were mostly about points and discounts. But what restaurant operators really needed was deeper customer understanding and engagement tools. Once we focused on driving measurable business outcomes — increased visit frequency, higher average spend per visit — everything else followed.

At Tote, we're applying that same focus on business impact. Yes, we have sophisticated AI and modern architecture, but it's all in service of helping operators grow revenue and improve operations. Every feature has to answer the question: how does this help our customers serve their customers better?

Another key lesson was the importance of deep domain expertise. Retail technology is complex, with industry-specific requirements that generic platforms can't address. We are not trying to be everything to everyone. We are laser-focused on fuel and convenience retail because that specificity lets us build solutions that truly solve their unique challenges. We will expand in a structured manner.

From an execution standpoint, Punchh taught me the value of getting the platform architecture right early. The headless, event-driven foundation we have built at Tote allows us to iterate quickly and deploy new capabilities without disrupting existing operations. That architectural flexibility will be critical to our growth in an environment where AI is creating immense opportunities.

Finally, as a successful entrepreneur, you had options on where to take venture capital from.  What advice would you give to founders about what to look for in a venture firm to work with?

Look for partners who understand your market deeply and can add value beyond capital. Investors need to believe in your vision even when it is early and unproven. You want intellectually honest thought partners in your entrepreneurial journey to build a consequential company. It is important to have patient and stage-appropriate investors especially at the early stages – ones that are empathetic and have a deep understanding of what it takes to build a company. And you want them to bring a level of calmness, wisdom and experience since the sine curve of a building a company has high amplitude. 

We had collaborated with the Cervin team in building Punchh and developed deep mutual respect for each other. Retail technology sales cycles are long – they require enterprise decisions with relationship building and solution refinement. The Cervin team understood these complexities. When we talked to Cervin about reimagining customer experiences in the physical retail world, they saw clear potential before we had customer demos or polished pitch decks. That conviction and willingness to back founders tackling big problems is invaluable.

The best investor relationships feel like extensions of your team. They are the people you call when you hit obstacles or have key strategic decisions to make. The partnership mindset has been crucial as we have scaled beyond concept to serving customers across the country.

Our sole raison d’etre is to back founders who have the intellectual, emotional and operational capability to build category defining companies, and in so doing deliver immense value to our constituents. Having had the privilege to work with Shyam at Punchh, we see all elements for success. The market is large, under-served and ready for disruption as a result of technological change. With the depth of domain and technical capabilities assembled at Tote, they are well positioned to outrun legacy players. 

We are thrilled to have the opportunity to back Shyam again at Tote!