Dropit plans next round after $25M raise
Dropit, a London-based software provider to retailers, raised a $25 million Series C round led by Vault Investments, CEO Karin Cabili tells Axios.
Why it matters: Startups that help retailers deal with inventory and supply chain issues are a hot commodity right now.
What's next: The company, which has now raised $50 million, plans to raise its next round within 24 months, which will be much larger (perhaps even a multiple) of its Series C and will fund expansion into Asia, Cabili says.
- She declined to comment on revenue, growth or valuation at this time.
Of note: Additional investors in Dropit include retail veteran and former Macy's CEO Terry Lundgren.
Details: Expansion is currently focused on the U.S. and Canada, though there is also demand for the technology in U.K. and Europe.
- Proceeds will be used to hire a sales team and invest in client support staff to support its retail brand and mall customers.
Flashback: After achieving proof of concept in August 2021, the company completed a convertible note to fund the business and then began raising the current round in April, Cabili says.
- The convertible note was rolled into the Series C, she says.
How it works: Dropit's technology makes it easier for retailers to utilize the merchandise in its stores to fulfill online orders, without disrupting a store's main source of business, which is visiting shoppers, Cabili says.
- The solution essentially frees up goods so they don't get stuck in the stores and have to be consequently marked down, she says.
- Retailers have historically ordered 50% more inventory than they actually need, and this solution should help reduce that cost.
- A great deal of money was spent on R&D on the product so that it was compatible with and could be layered onto retailers' existing IT infrastructures.
- "That's the key differential," Dropit's president Stuart Ford tells Axios, so that retailers can immediately implement it and don't have to "rip out" existing IT infrastructure.
The bottom line: Since the advent of e-commerce, it has become increasingly difficult for retailers to predict the amount of inventory they will need for any given season.
- And it's a problem that's been great exacerbated by the pandemic, requiring new solutions.