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PayPal invests in a gifting service for e-retailers
Loop Commerce’s software, still in beta test mode, would let gift recipients exchange gifts before the e-retailer ships them. The startup has raised $13.2 million to date.
EBay Inc.’s PayPal unit has joined a group of investors providing Series A funding to Loop Commerce Inc. The Silicon Valley startup is developing software for e-retail sites that will allow consumers to buy gifts online and also allow gift recipients to exchange or refine the buyer’s selections prior to the e-retailer shipping the gift.
Loop Commerce announced PayPal’s participation in the funding round today.
Although it did not say how much PayPal contributed, Loop Commerce says it has raised $13.2 million to date, including $1 million in seed funding and more than $7 million from other Series A investors it announced last month.
Investors in the round announced last month include an all-star lineup of individuals in the e-commerce space. They include: Mark Carges, the chief technology officer of eBay; Don Katz, founder of audio book service Audible.com and an executive vice president at Amazon.com Inc.; Chuck Geiger, chief technology officer at online bookseller Chegg.com; Roy Rubin, founder of e-commerce platform Magento Inc. (now part of eBay); and Michael Scharff, former senior vice president of retail at Toys ‘R’ Us. Amazon.com is No. 1 in Internet Retailer’s Top 500 Guide; Chegg is No. 103; and Toys ‘R’ Us is No. 30.
Loop Commerce says its service, which is provided over the web following the software-as-a-service model, lets consumers initiate a gift purchase but allows for the recipient to refine the selection and fill in any remaining details. For example, a gift buyer can select a sweater, but then the recipient picks her size and adds her preferred shipping address. Loop Commerce says the service will help reduce cart abandonment and limit the number of returns.
“Improving the online gift-giving and -receiving experience is of great importance to both retailers and consumers,” says Don Kingsborough, vice president of global strategic development for PayPal, on the investment. “We believe Loop Commerce represents the next stage in the evolution of the multi-billion dollar gift-card industry, empowering retailers and creating new opportunities through next-generation gifting experiences.”
With the investment, Kingsborough will join Loop Commerce’s board as an observer, Loop Commerce says. “Together with PayPal, we plan to further accelerate the capabilities of our platform and the rollout of the Loop solution to retailers,” says Roy Erez, Loop Commerce CEO.
To learn more about e-commerce startups raising capital, check out the January issue of Internet Retailer magazine, in print and online Jan. 1. Click here to read stories from the current issue or here to sign up for a free print or digital subscription.