Loop Returns, a software company looking to handle the costly and inefficient process of retail/e-commerce returns, has announced the close of a $65 million Series B financing round. The round was led by CRV, with participation from Shopify and Renegade Partners, as well as existing investors FirstMark Capital, Ridge Ventures, Peterson Ventures and Lerer Hippeau.
The deal values the company at $340 million post-money.
Loop Returns was co-founded by Jonathan Poma after he was working at an agency and consulting with a big Shopify brand to help them with returns and exchanges. He partnered with longtime friend Corbett Morgan to start Loop Returns.
The software works with the Shopify platform to reduce the cost and difficulty with a commonplace issue in retail, which is returns. In fact, according to Shopify, returns account for 20 to 30% of e-commerce sales. For big and small brands alike, this is a trend that not only costs money, but potentially loses a customer and future revenue.
Loop approaches the return by navigating the user through a series of questions aimed at keeping their business. It starts with questions around sizing of the item, and then moves to the notion of an exchange, and then offers the customer credit with the brand over a return.
If a return is all the customer wants, Loop handles some of the stickier pieces of that process, such as shipping labels and refunds for the brand.
The company had big plans around international expansion, platform expansion and product expansion ahead of the pandemic. Ultimately, that Black Swan moment led the company to focus on its core offering and taking care of its customers, and it paid off, especially on the heels of the acceleration of e-commerce.
The company has grown its team from 20 employees in 2019 to 100, with 41% of the team identifying as female and 16% identifying as BIPOC.
In terms of traction, the company has gone from 200 to 700 customers, and from $26 million in returns processed to just over $100 million in the same time frame.
Poma told TechCrunch that the greatest challenge for the startup is scaling the team.
“It’s about bringing great people and keeping them aligned toward a common goal, especially in this remote first world,” said Poma.
