Returnly, a San Francisco-based company that works with retailers and brands to handle post-purchase payments, said today it has raised $8 million in series A funding and secured a credit facility that will enable it to finance over $300 million in repurchases.
The funding round was led by Mundi Ventures and The Venture City, with participation from Novel TMT Ventures and CoVenture, Returnly said. The line of credit, which would give Returnly the capacity to finance $300 million in orders per year made with Returnly Credit, is facilitated by CoVenture.
Returnly, which raised $3.2 million in a seed round in October 2016, offers a range of solutions to retailers and brands to help them credit customers who wish to return products with an online wallet (Returnly Credit).
The company, which counts Fanatics, Untuckit, Outdoor Voices, and GREATS among its hundreds of merchant partners, says it has found that retailers that make it easier for customers to return goods end up seeing them come back and make purchases with them again.
June 5th: The AI Audit in NYC
Join us next week in NYC to engage with top executive leaders, delving into strategies for auditing AI models to ensure fairness, optimal performance, and ethical compliance across diverse organizations. Secure your attendance for this exclusive invite-only event.
Part of Returnly’s offerings include letting brands re-engage with customers who are returning products online, to help them buy again with the return credit. Typically, this all happens before the customer has even shipped the return item, in an attempt to build loyalty and trust. Returnly says it has issued more than $100 million in returns credit to end-customers.
Additionally, “we provide tools that help merchants manage returns through their lifecycle, from customer return requests to returns processing and restocking, and order refunds,” Eduardo Vilar, the company’s founder and CEO, told VentureBeat. Powering Returnly’s tech is machine learning, which it uses to make the right return credit decisions and determine what returns and shoppers to underwrite, Vilar said.
The challenge for Returnly is that some of its offerings, such as credit rating, could be done by any bank or credit organization. But Returnly has an edge because it leverages proprietary data and machine learning to make the right underwriting decisions in real time, said Ali Hamed, partner at CoVenture.
“Machine learning is fundamental to Returnly first because shoppers can buy again using their return credit before returning the original items. Second, because we front the repurchase amounts and settle in real time with merchants. And third, because we take the returns risk. So the only way for us to have this much skin in the game and be viable as a business is to have a deep understanding of post-purchase shopper behavior and leverage our data network and machine learning to make the right credit decisions in real time,” Vilar told VentureBeat.
Outdoor Voices, an American clothing company, uses Returnly’s tech to give its shoppers the flexibility to place new orders right away, before shipping their merchandise back, rather than wait for a credit card refund, it said.
For retailers, returned goods is part of the game. Customers in the U.S. alone returned about $351 billion worth of items that they had purchased from brick-and-mortar retailers and online stores in 2017, according to estimates by National Retail Federation.
