Recommerce Platform Trove Looks to European, 3PL, Vertical Expansions

Trove recommerce trade-in feature

Recommerce platform Trove has raised $30 million in a Series E round, bringing its total haul to more than $150 million as integrates its software with major 3PLs, eyes European expansion and plans to add vertical categories later this year beyond its sweet spot of outdoor and luxury retailers and brands.

The round was co-led by Wellington Management and ArcTern Ventures, with participation from Mitsui Fudosan’s CVC Fund, G2 Venture Partners, Prelude Ventures and other existing investors.

Trove handles recommerce programs for companies like Carhartt, lululemon, Patagonia, REI, Levi Strauss, Arc’teryx, Allbirds and Canada Goose. According to data from Bloomberg research unit Second Measure, Trove powers more than 60% of all branded resale traffic in North America.

The company owns a processing facility at its headquarters in Brisbane, CA, and recently added four more facilities in the U.S. and one in Canada through partnerships with Savino Del Bene, an Italian 3PL with operations in 60 countries, and circular textile operator Tersus Solutions.

Gayle Tait, CEO of Trove, said the company is using the investment to upgrade and expand use of its software. It uses machine learning, AI and computer vision to determine item value when returned in store or at a warehouse, generating a unique SKU for resale, then optimizes routing of where it should go. Once processed, items are integrated into a branded recommerce storefront powered by Trove, including images and descriptions.

“The next phase is transplanting our software into third-party operations to enable expansion beyond our own facility, supporting increasing capacity,” Tait said. “Investments we’ve made since the last round are empowering us to scale, creating intelligence with better unit economics. That’s one of the biggest challenges resale has had historically.”

Optimizing logistics by reducing transportation of returned goods between facilities through expanding 3PL partner locations is what will drive the improved unit economics, Tait said. “We’ll work with brands and retailers in the facilities they’re already in, creating a lot of efficiencies that we weren’t able to before.”

Tait said Trove’s software integrates with a retailer or 3PL’s WMS system to facilitate the processing of returned goods. “These are the sorts of capabilities we’re investing in to enable us manage a very intricate physical process in a scalable way.”

The company’s focus is what was attractive to “impact-driven” investors like ArcTern, Tait said. “We’re bringing in investors who deeply understand the circular economy, and their teams have been looking at the space for a while,” she said. “We’re excited about this next phase and leveraging that understanding.”

The move into 3PL partnerships and software integrations is what will power expansion into new verticals later this year, Tait said. “We’re at an exciting inflection point for the company, which is what made it possible to raise money in a tough environment,” she said.

Tait said Trove is seeing recommerce grow beyond its roots with younger, more values-driven consumers to other demographic groups. According to the Ellen McArthur Foundation, resale is growing five times faster than overall retail, and is projected to represent 23% of all sales by 2030.

“People have always been in the market for high quality items sold at a lower price point, and never more than in this inflationary environment,” she said. “We’re also seeing customers who don’t have the same reservations about buying secondhand than they did in the past. It’s becoming more of an established practice across all generations.”