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Loop Commerce
You probably haven’t heard of Loop Commerce, but the startup already has the attention of many bigwigs in the online payments and retail world.
The online gift-giving company said Tuesday it’s raised an extra $16 million from PayPal and executives from Amazon, Facebook and elsewhere to help it keep growing and hire more staff. With this latest funding round, Loop has now raised about $30 million since its late 2012 founding. The privately held Menlo Park, Calif., firm declined to provide a current valuation or financial results.
“We’re already seeing phenomenal growth in usage and education,” Loop CEO and co-founder Roy Erez said in an interview. “And when it comes to the holidays, we’re seeing growth.”
Loop offers a twist on the typical electronic gift card, allowing users to buy specific items — such as shoes or pants — but without having to choose a size or color or style, and without needing the recipient’s mailing address. A voucher for the gift is emailed to the recipient, who can plug in those specifics to get the gift, or she can exchange the gift for something else on a retailer’s site. (Returning the gift for cash depends on a specific retailer’s return policy.)
Loop launched its service before the 2014 holiday season, and its retail partners now include Macy’s, Lancôme, Urban Decay, Diane von Furstenberg, Johnny Was, Relax the Back and Thomas Dean.
The startup is part of the expanding world of e-gifting, in which people can send gift cards, subscription services, concert tickets and plenty more through the Web. Loop differentiates itself by providing e-gifts that are more flexible than an emailed voucher for a single item, but more specific — or, as Erez argues, more personal — than an emailed gift card. Similar services are available through Giftly, Sincerely and others. As online retail continues to evolve, more services like Loop are sure to crop up to help retailers and customers find new ways to send gifts online.
The idea for Loop, Erez said, first came when he wanted to buy a friend a gift for his new baby boy. “I found myself struggling,” he said. “I wanted to buy something very thoughtful but that he wanted.”
Erez said his company lets buyers pick out “hard-to-gift” items — such a apparel, shoes and cosmetics — that require a lot of specifics and could otherwise result in returns or exchanges by the receipt. About 60 percent of those who receive a gift through Loop accept it, he said, while most others exchange the gift for a similar item, such as exchanging a handbag for a different type of handbag.
The latest funding round included PayPal — a past investor — as well as Amazon executive vice president Don Katz, former eBay chief technology officer Mark Carges and Dan Rose, Facebook’s vice president of partnerships. Executives from Brooks Brothers and Chegg joined in the round, as well as a former Toys “R” Us and Best Buy executive. The round was led by investors Oren Zeev, Daniel Tierney and Stephen Schuler.
