Core Insights - Amazon has closed a $12 million seed financing round for Cambridge Terahertz, a startup that has developed a 3D imaging system to detect contents inside unopened packages, addressing the issue of return fraud in retail [1][2]. Investment and Technology - The investment was led by venture firm Felicis and included participation from Amazon's $1 billion Industrial Innovation Fund, which aims to support technology solutions for Amazon's logistics operations [1][3]. - Cambridge Terahertz's technology is expected to enhance Amazon's ability to screen inventory for damages and defects, improving efficiency in the return process [4][5]. Industry Context - Retailers faced $103 billion in losses due to fraudulent returns last year, with the scam involving customers keeping items while returning empty packages or unrelated junk [2]. - Amazon's Industrial Innovation Fund, launched in 2022, focuses on investing in businesses that can provide technological advancements for its complex operations [3]. Company Background - Cambridge Terahertz was co-founded in 2023 by Nathan Monroe, who researched terahertz imaging at MIT, and the company has developed a compact imaging system that can fit in a hand [7][8]. - The startup has a small team of 10 employees and aims to provide unobtrusive detection of concealed items through nonconductive materials [8].