While we had the chance to be at home more over the past few years, you may have spruced up a home office or replaced a couch. However, once the new item was in your home, you may have had some buyer’s remorse or the item didn’t live up to its website photo.
In any case, that oversized item needs a new home, and FloorFound is working with brands and retailers to give that couch to someone who will love it, while avoiding the landfill.
We first caught up with the Austin-based company and its founder and CEO Chris Richter in 2020 when FloorFound was getting started. The company went on to raise $4 million in seed funding in 2021 and is now back with a $10.5 million Series A financing round.
The round was co-led by Next Coast Ventures and LiveOak Venture Partners with participation from existing investors Flybridge Capital Partners and Schematic Ventures and new investor Data Point Capital.
Richter told BlueHillco that the funding comes as more people are interested in purchasing resale. The company-sponsored survey done in 2021 found that over 90 percent of U.S. consumers reported buying resale items, while research from First Insight and the Wharton School suggests 83% of consumers who have purchased secondhand products plan to do so again, which is up from 17% in 2019.
“The tailwinds that were supportive of our business in 2020 and 2021 have only gotten better, as has consumer sentiment around sustainability, so we have grown accordingly,” he added.
Reverse logistics don’t work without a plan on how to handle the return and resale of those larger items, however, and FloorFound is making this process simpler through its end-to-end technology platform that streamlines both the recovery and resale of returned, lightly used and open-box items.
In February 2021, the company launched its solution and since then has more than doubled its recommerce sales each quarter on average. It also grew its client base five times, which includes furniture brands like Inside Weather, Floyd and Burrow. And, Richter noted, FloorFound worked with its clients to keep nearly 450,000 pounds of furniture in circulation and out of landfills so far.
FloorFound is the latest to raise funding within a U.S. resale industry poised to grow over 150% in the next decade and be valued at $330 billion, according to research from Mercari and GlobalData. It joins Loveseat, also based in Austin, which raised $7 million in Series A funding in March for its returned home goods marketplace. On the fashion front, companies like Recurate announced $14 million Series A funding this week.
Meanwhile, FloorFound intends to use the new funding to expand its market presence in the U.S. and move into additional retail verticals like appliances, mattresses and exercise equipment. The company currently has four major third-party logistics partnerships and over 40 warehouse hubs, a number Richter plans to triple this year.
What makes FloorFound stand out from its competitors is its approach to putting retailers, which often struggle with how to effectively do returns, at the center of recommerce, according to Richter.
“Retailers are going to miss out on a revenue opportunity if they don’t participate in recommerce, but trade-in and buy-back is a leap for many of them,” he added. “By focusing on the problem of oversized returns, we can help them use that inventory to launch new sales channels.”