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

The fashion industry has a huge problem: Despite many returned items being unworn or undamaged, a lot, 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 return logistics software company Optoro. New York-based (Re)vive wants to help companies find a better ending for their returned items.

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

The underlying tech is quite interesting. The startup’s founder and CEO, Allison Lee, said the company’s software lets its employees 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 identifying number — was returned and how much money they can potentially make from saving and selling the returned items.

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

Lee said the company is seeing strong demand now and expects it to grow as pressure continues to mount on retailers to clean up and minimize their impact on the environment. She added that companies are now under more scrutiny about damages from investors and shareholders — they can’t write those losses off as part of doing business as they used to.

There is a lot to like about this approach. For one, I love tech that helps companies be more sustainable and reduce their environmental impact, even if that isn’t their goal. Some companies may work with (Re)vive because of its sustainability angle, but many more will probably sign up due to shareholder pressure or to improve their bottom lines. It’s nice that they can mitigate their environmental impact at the same time.

It’s also a relatively light lift for companies to use such a service. Retailers already send out their “damaged” items from stores, and Lee joked that working with (Re)vive is as easy as just switching the shipping label on the box to a (Re)vive warehouse instead of a company’s own.

(Re)vive has been seeing good demand, and Lee told TechCrunch that the company’s revenue grew nearly 15x last year. But it took a while for the team to land on its current strategy.

The company today is very different from what it started up as: Founded in 2017 as an in-store tailoring service known as Hemster, the company raised a seed round and was used in more than 300 stores before the pandemic brought the business to a halt.

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

Next, she launched an online repair portal aimed at consumers. But when the team realized the platform was largely being used instead by retailers trying to repair inventory in their warehouses, they decided to pivot. Since the switch, (Re)vive says it has helped companies save $23 million in GMV and has saved 150,000 garments from landfills.

“When we were doing Hemster, we were a nice-to-have,” Lee said. “If you are a nice-to-have, you don’t have priority in [a retailer’s] roadmap. Once we pivoted, we became a must-have.”

(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 on raising venture capital after their latest pivot but decided to after it was approached by Equal Ventures, which had done in-depth research on the category for months.

I was interested in this one because I dealt with returns and damages for years as a sales associate at Anthropologie. I would process many returns that ended up as damages due to the tiniest thread pull or imperfection. What’s worse, employees weren’t allowed to take these items home either — doing that would get you automatically fired — meaning I would stare at a growing mountain of nearly perfect items headed to a landfill every single day.

And my perspective is that of one employee, at one store, on one shift, at one retailer. It’s hard to fathom how much all that wasted material adds up to. Hopefully (Re)vive can make a meaningful dent.