FloorFound, an Austin-based startup that provides the means for retailers to resell large, bulky returns, has raised $10.5 million in a new funding round to help drive its expansion both geographically and in terms of the categories it handles as it rides the recommerce wave.
The Series A round was 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. The company was founded in 2020, and raised $4 million in a 2021 seed round.
Co-founder Chris Richter said FloorFound is looking to move into all areas of bulky items for resale beyond its core of furniture products, including mattresses, fitness equipment and appliances. The company has 43 warehouse locations nationwide where items are processed for resale and fulfillment on behalf of retailers, through partners XPO and Metropolitan Warehouse and Delivery. Four of the facilities are owed by FloorFound itself.
The company plans to use the funds to triple its warehouse space and double its current team of 22 employees. Richter said FloorFound is also figuring out how to add a trade-in offering in addition to resale. “Brands can set up something like a private label version of Facebook Marketplace, limited to their own products,” he said.
With recommerce a hot category due to inflation and consumers’ desire to keep products out of landfills, coupled with the high volume of ecommerce returns, Richter said FloorFound is seeing its customer count nearly triple and its topline grow by about the same multiple.
“I know the market is tough, but it actually feels like more momentum since the beginning of this year around recommerce,” he said. “There’s the tailwind of supply chain disruption, and inflation is painful. In our consumer survey, 75% plan to buy resold items online, 84% of those 30 and under. The drivers are price, sustainability and uniqueness.”
In this environment, Richter said, recommerce is an obvious thing for brands to lean into, with customers more price sensitive and value-driven. “Retailers have a strong sustainability charter,” he said.
While liquidation of overstocked merchandise is not a key category for FloorFound, Richter said it’s another channel the company can pursue.
“We can do it under the banner of recommerce, and call it a digital warehouse sale,” he said. “Historically, companies have done it, especially if they have no outlet stores. Because we have such a big footprint and built-up capacity, we could handle not only recommerce but second quality, overstock and canceled orders. It can help retailers free up warehouse space, keep things out of landfills and be a great customer acquisition channel.”
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