If you ever buy an oversized piece of furniture online that you need to return, FloorFound may be the company behind the return.
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“E-commerce penetration grew to 30 percent during the global pandemic, and we will never shop in the same way as in the past,” CEO Richter told Crunchbase News. “No one has focused on the oversized returns of that 30 percent, which accounted for more than $92 billion of revenue last year.”
Instead, FloorFound’s “push button” returns lifecycle management platform manages the return from coordination of the initial pickup to resale, while also eliminating costly transportation and handling charges. The company’s customers include Floyd Home and Inside Weather, and it has built a nationwide network with third-party logistics service providers.
The Austin-based company raised $4 million in seed funding and is developing a circular commerce platform that facilitates returns and resales of oversized products for e-commerce retailers.
LiveOak Venture Partners led the round with participation from Flybridge Capital, Next Coast Ventures, 8VC1 and Brett Hurt. Existing investor Schematic Ventures also joined the round. The new funding gives FloorFound a total of $4.6 million in funding since its inception in 2020, according to the company.
Mike Marcantonio, principal at LiveOak, has known Richter for over a decade and said in an interview that he and Matthews bring domain, logistics and problem-solving expertise to the table.
“There has been tremendous growth in e-commerce, but the unique challenge is with oversized items — they had no way to be resold,” Marcantonio said. “No one had figured this out, but now FloorFound has an exciting way to help the logistics challenge.”
In 2018, 10 percent of retail sales were returned, representing approximately $369 billion, according to Wharton Marketing Professor Thomas S. Robertson. Depending on the merchandise, online return rates can range from 8 percent all the way to 40 percent.
The online return rate for oversized items is approximately 12 percent, Richter said. Of that, 80 percent ends up being disposed of in landfills — nearly 9.7 tons in 2018, according to the Environmental Protection Agency.
“When I think about types of customers, 60 percent of the new housing market are millennials,” Matthews said in an interview. “If the price point is a barrier to getting an upgraded piece of furniture, we have drastically discounted sofas with a scratch on the leg that they won’t care about. This introduces products to new customer segments.”
The capital will be used to accelerate go-to-market initiatives, new product development, and build out the team in engineering and data science, as well as expand into additional segments of the oversized e-commerce space, Richter said.
Anna Palmer, general partner at Flybridge, was an entrepreneur in “recommerce,” the term for the selling of previously used goods, and said she is attracted to businesses that have a community component to them.
“This is clearly where retail is going, and what customers are asking for,” Palmer said in an interview. “Looking at FloorFound, they are trying to recapture all of that furniture going into landfills. They already have an entire network for where retail is going to be in five or 10 years.”
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