Columbus based Loop, the exchange-first returns platform for eCommerce, announced today that it has secured $65M in a Series B funding round led by CRV, with participation from Shopify, and Renegade Partners. Existing investors FirstMark Capital, Ridge Ventures, and Lerer Hippeau are also participating in the round. The new funding will be invested into product development to create an even better online returns experience for customers that leads to higher lifetime value for brands.
Loop currently works with over 700 online brands including Brooklinen, Chubbies, and MadHappy to create a returns experience that turns what could be the end of a relationship into an experience that retains customers. To date, Loop has helped companies retain $400 million in revenue for their brands through its exchange-first platform. The funding follows a year of nearly 3x revenue growth and significant product innovation.
“We’re proving that returns can be a profit center, and a driver of customer lifetime value,” says Jonathan Poma, CEO and co-founder of Loop. “Most returns happen because the product didn’t fit, not because they don’t want the product —and so bringing an exchange-first mentality to the return experience that feels just like shopping. This creates a win-win between the brand and the customer.
“We are excited to partner with Loop as they transform the online return shopping process,” says Murat Bicer, general partner at CRV. “With Loop, what traditionally resulted in a disappointing disjointed experience is being swiftly morphed into an easier, more efficient and delightful interaction for the consumer. Retailers love Loop because it’s easy to implement and turns what was once a cost center item into a more cost-effective, customer first process that often results in sales retention or even a source for additional revenue.”
“This round of funding allows us to invest heavily in our product development and go-to-market teams so that we can continue to transform what has historically been one of the biggest challenges for online shoppers and brands into an experience that shoppers love and that retains customers and revenue for our brands,” added Poma.
With Loop, online brands are able to set up an on-demand returns portal that allows a customer to initiate a return on their time, they don’t have to wait for a brand representative to email, chat, or call them back to get started. A process that, when done manually, can take a service rep 15 to 30 minutes to complete. Brands save their team hours per week in back and forth communication and customers get the same quality experience they get when initially making the purchase.
“Managing customer returns is a critical pain point in e-commerce, and Loop has succeeded in deeply solving this problem for many merchants,” says Satish Kanwar, VP, Product Acceleration at Shopify. More and more Shopify merchants are converting this common challenge into an opportunity, which creates even stronger loyalty and value with Loop.”
On top of creating a platform to improve the customer’s experience, Loop is also redefining what a return means. Many brands view returns and refunds synonymously. This creates a negative association with the word return, and makes it seem like something to avoid. Instead Loop offers three simple but distinct outcomes: a refund, store-credit, or an exchange. When you consider that a customer who takes an exchange is almost 34% more likely to make a second purchase, forward-thinking brands no longer view returns as solely a cost reduction play and instead view it as an investment in customer retention.
Not only does Loop allow customers to exchange for a new size or color but actually allows the customers to exchange for a completely different item. This creates an amazing upsell opportunity for brands and turns what used to be solely a cost center into a profit center. One of the most effective ways to encourage this behavior is by offering “bonus credit” that gives shoppers extra money that they can either use or lose to encourage shoppers to exchange rather than accept a refund.
“The incremental revenue we create through upsells in our return process is up almost 100 percent,” states Chubbies CFO Dave Wardell. “That likely means $250k in additional revenue created through Loop.”
CRV is a venture capital firm that invests in early-stage enterprise and consumer startups. Since 1970, the firm has invested in more than 400 startups at their most crucial stages, including DoorDash, Airtable, Patreon, Drift and Iterable. Founders need more than capital to build a great company. It takes a partner who understands the entrepreneurial journey and knows what it takes to win. From founding to IPO and beyond, CRV is there every step of the way. Founders rely on CRV to be trusted, long-term, committed partners, which has helped make CRV into one of the longest-running venture capital firms in the world. Learn more about CRV and the companies shaping the future at https://www.crv.com.
Shopify is a leading global commerce company, providing trusted tools to start, grow, market, and manage a retail business of any size. Shopify makes commerce better for everyone with a platform and services that are engineered for reliability, while delivering a better shopping experience for consumers everywhere. Proudly founded in Ottawa, Shopify powers over 1.7 million businesses in more than 175 countries and is trusted by brands such as Allbirds, Gymshark, Heinz, Staples Canada, and many more. For more information, visit www.shopify.com.
Public Relations for CRV