Optoro has raised $23.5 million to smooth the distribution of merchandise sold online. The round was led by Revolution Growth Fund, which was founded by former AOL execs Steve Case, Ted Leonsis, and Donn Davis.
Optoro sells software-as-a-service that helps online retailers manage and sell their returned, damaged, and excess inventory. The system keeps track of a sellers’ goods and posts that inventory in online marketplaces to connect it with secondary buyers. Optoro’s OptiTurn product uses data analytics to match product pricing to real-time market conditions. This allows clients to earn as much as possible off goods that otherwise would have dust gathering dust in a warehouse. Optoro also provides solutions to help clients manage their inventory and avoid liquidation in the first place.
Free returns are now a staple of customer service for e-commerce companies, but the costs add up. The country’s largest retailers and manufacturers have around 10 percent of their purchased items returned, Optoro said, which is a “costly, logistical challenge.” Optoro’s platform can help them recover these costs and potentially double the amount they were making on liquidated products. Customers include big names like Amazon, eBay, Buy.com, and BestBuy.
This investment will allow Optoro to scale its software-as-a-service products, as well as the marketing platform. This is Revolution’s Growth fifth investment. The firm was founded in 2011 and closed a $450 million fund to invest in “speed-ups.” Its strategy is to concentrate its money on 10 – 12 companies, making investments of $25 – 50 million. The goal is to take these companies into a growth stage and help them achieve mainstream adoption or leadership in the market. The DC area firm is focusing its investments in the Eastern part of the US. Portfolio companies include FedBid, Living Social, Zipcar, Runkeeper, and HelloWallet.
Optoro is based in Lanham, MD and has around 90 employees. The company has raised $33 million to date.