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Dropit plans next round after $25M raise

Illustration of a shopping cart icon full of money.

Illustration: Aïda Amer/Axios

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.
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