Deal Dive: How (Re)vive grew 10x in the last year helping retailers recycle and sell returned items

The fashion industry faces a huge problem: although many returned items are unworn or undamaged, many, if not the majority, end up in the trash. An estimated 9.5 billion pounds of returns ended up in landfills in 2022 alone, according to data from returns logistics software company Optoro. (Re)vive, based in New York, wants to help businesses find a better end for their returned items.

(Re)vive takes products that retailers have deemed too damaged to sell and repairs them, whether that means washing them, reattaching a button, or rolling lint on dog hair. The items are then sold through different channels and (Re)vive’s data platform helps retailers monitor and manage their waste.

The technology behind it is quite interesting. The startup’s founder and CEO, Allison Lee, said the company’s software allows its employees to sort, label and determine the outcome of a box of returned items in about three minutes. The software will also show retailers how much of a certain SKU – a product’s identification number – has been returned and how much money they can potentially make by saving and selling the returned items.

Refreshed items that are still in season return to stores, while (Re)vive sells out-of-season products on third-party channels like eBay and Poshmark on behalf of retailers and takes a cut of each sale.

Lee said the company is currently experiencing strong demand and expects it to grow as pressure continues to grow on retailers to clean up and minimize their impact on the environment. She added that companies are now subject to closer scrutiny when it comes to damage caused by investors and shareholders – they can no longer write off these losses as part of their business operations, as they used to previously.

There is a lot to like about this approach. On the one hand, I like technologies that help companies be more sustainable and reduce their environmental impact, even if that is not their goal. Some companies may work with (Re)vive because of its sustainability approach, but many others will likely join because of shareholder pressure or to improve their bottom line. It’s good that they can mitigate their environmental impact at the same time.

It is also a relatively simple way for businesses to use such a service. Retailers already ship their items “damaged” from stores, and Lee joked that working with (Re)vive is as easy as simply transferring the shipping label on the box to a (Re)vive warehouse in instead of that of a company.

(Re)vive has seen good demand, and Lee told TechCrunch that the company’s revenue grew nearly 15 times last year. But it took time for the team to adopt its current strategy.

The company today is very different than when it started: Founded in 2017 as an in-store sewing service known as Hemster, the company launched a seed series and has been used in more than 300 stores before the pandemic shut down activity. .

“I thought I found product-market fit and raised all these millions of dollars and then things happen and it’s like what do you do now? Lee remembers.

Then it launched an online repair portal for consumers. But when the team realized the platform was widely used by retailers trying to repair inventory in their warehouses, they decided to change direction. Since this change, (Re)vive claims to have helped businesses save $23 million in GMV and saved 150,000 items of clothing from landfill.

“When we were doing Hemster, we were nice to have around,” Lee said. “If you’re a nice person, you don’t get priority on (a retailer’s) roadmap. Once we pivoted, we became a fixture.

(Re)vive has now raised $3.5 million in seed funding, led by Equal Ventures and Hustle Fund, with participation from Banter Capital, Coalition Operators, Mute VC and others. Lee said the company wasn’t planning to raise venture capital after its latest pivot, but decided to do so after being approached by Equal Ventures, which had done extensive research on the category for months.

This one interested me because I handled returns and damage for years as a sales associate at Anthropologie. I would deal with many returns that ended in damage from the slightest thread pull or imperfection. Worse yet, employees weren’t allowed to take these items home either—doing so would automatically get you fired—meaning I’d watch a growing mountain of near-perfect items head to a landfill every day.

And my point of view is that of an employee, in a store, on a team, at a retailer. It’s hard to imagine the total amount of all this waste of materials. Hopefully (Re)vive can make a significant dent.