It's a dirty little secret among on-line retailers that lots of inventory goes unsold, ages out, is returned, etc. Optoro to the rescue…this a nice niche business in supply chain and demand for its services will never disappear.
Optoro,
a provider of asset recovery software, has raised a $23.5 million round of
funding led by
Revolution Growth Fund. The company’s solutions help online
retailers manage and sell their returned and excess inventory. Optoro has
raised about $33 million in financing to date from investors including Grotech Ventures,
who led the company’s previous round this past January.
According to PEHub,Ted
Leonsis has a lot to juggle: among other things, he’s a co-founding partner of
the venture firm Revolution Growth; he’s a director on the board of American
Express; and he’s vice chairman and co-CEO of Groupon, an interim position.
But
when Leonsis thinks he spies a lucrative new opportunity in the world of
e-commerce – he’s been immersed in it since selling a shopping catalog startup
in 1993 to AOL, where he resigned as vice chair 13 years later — he’s more than
willing to make time for it.
Such
is the case with Optoro, a five-year-old Lanham, Md.,-based company whose
software enables big-box retailers like Best Buy to more easily re-sell
inventory that has been returned by customers.
Revolution
just led a new, $23.5 million round in Optoro, along with Grotech Ventures,
which provided Optoro with $7.5 million in Series A-1 financing in January.
According to Leonsis, who has joined Optoro’s board, Revolution chipped in
roughly $20 million, with Grotech contributing the rest. Optoro’s first round
of funding came through a $1.9 million round in 2011 whose investors included
Nigel Morris, co-founder of CapitalOne.
Certainly,
Optoro seems to be chasing a big market. According to a 2009 report published
by the National Retail Federation, roughly 8% of all retail goods purchased are
returned annually. (In 2009, that translated into $185.5 billion dollars.)
Fraud makes up about 5% of that total.
Much
of that money is lost, with retailers faced with few options other than
middlemen who sell the items to “the kind of stores you see selling electronics
on Broadway,” as Leonsis describes it. But Optoro’s data analytics and
marketing platform is now making it possible for those same retailers to
disperse their returned and excess inventory to consumers through a number of
online marketplaces, including Amazon, eBay, and Optoro’s own consumer-facing
site, Blinq.com.
Optoro
owns just one warehouse, and there aren’t plans for another — yet — as most
goods it helps to sell are shipped directly from retailers to buyers.
A VC in Vacationland 