Investors: Annie Kadavy, Urvashi Barooah
E-commerce as a % of overall retail has almost tripled in the last decade. There are now about 59 million packages delivered every day in the US. In a country where there are 130 million households, that means 1 box is on the doorstep of every other home in America every day. But our infrastructure hasn’t grown to meet this new demand. Delivery trucks clog up our streets and pollute our skies. Single use plastics contaminate our oceans. Our increasing demand–and now addiction to instant convenience--is destroying our planet.
This is the problem that The Rounds is solving. Co-founders Alex Torrey and Byungwoo Ko are repeat entrepreneurs. Alex had started and grown his own e-commerce company and Byungwoo founded an edtech company before joining Uber and helping the Eats team scale across US and Canada. When they met at Wharton they quickly realized their shared vision for the future of retail–one that included convenience and sustainability, not one at the expense of another.
The Rounds is building the last mile rails for sustainable commerce. Today, The Rounds offers a membership model for zero-waste commerce. Members can access a wide range of everyday essentials–from toilet paper and toothpaste to locally sourced coffee beans and pastries. Items are stored at neighborhood fulfillment centers and delivered via e-bikes and electric vans at a regularly scheduled time in tote bags and, where possible, reusable containers. When members are finished with their items, Rounders bring a refill and collect the empties.
There are a few of things about The Rounds that have resonated especially well with members:
1. Convenience: just like any other one-way delivery, items show up at your doorstep. This happens at the same time every week just like your garbage or recycling service. Even better, as you recycle your empty bottles The Rounds learns your household’s specific consumption patterns and delivers your refills magically right before you run out! The impact on cognitive load is huge–who wouldn’t rather use their working memory for something other than remembering when to stock paper towels, laundry detergent or cereal.
2. Cost and Quality: Every product sold by The Rounds is at cost parity or better than if you were to purchase it at your neighborhood convenience or grocery store. We believe this is imperative for any retailer today, especially for commodity products.
3. Sustainability: The Rounds has zero packaging waste. Zero. No boxes, no single-use plastic, no packaging tape, no thin film wrappers. There are some studies showing that today’s consumers will pay more for sustainable alternatives but we conservatively believe that cost, quality and convenience--perhaps unfortunately but realistically--trump sustainability alone. The beautiful thing about buying sustainably from The Rounds is that you don’t have to compromise those other things to do so.
The customer love is evident from the numbers. More than 10K members have signed up across Philadelphia, Miami, DC and Atlanta. Overall, the company has grown revenue by more than 10x in the last year.
Why we’re excited:
Consumer delivery is a multi $100B category that has yielded many large companies including household names like Amazon, DoorDash, Uber and Instacart. COVID has accelerated e-commerce adoption and, at the same time, consumer demand for sustainable options is growing. The average household spends at least $200 each month on “bottom of the shopping cart” items, not to mention spend on local products that The Rounds also delivers.
A lot of delivery companies, recently GoPuff and Gorillas, have struggled to find sustainable business models. The Rounds is different in a few perhaps nuanced but critical ways. Their subscription based service means predictable, recurring revenue which enables better inventory management, routing and ultimately, profitable unit economics on a per member basis. Because of their batched delivery model, The Rounds can fulfill 5x more deliveries per hour compared to on-demand models. Taking away empties makes the service stickier–it is more akin to a utility like recycling or trash. It’s also more defensible. Cleaning and refilling containers is not a competency that many delivery companies have or want. The Rounds is building the last mile rails for products to flow in and out of every household. Today they fill their tote bags with household essentials. Tomorrow, they can become the default channel for brands and local merchants to deliver–and return–any product.
All early stage bets are ultimately about teams. Alex has been entrepreneurial all his life. He quit his last business, a company he’d started a few years out of college, because he didn’t want to run a lifestyle company. With The Rounds, he is determined to build a generational company. From his time at Uber, Byungwoo knows better than almost anyone what it takes to scale an operationally intensive business from the ground up. Together, they have built an exceptional team from Uber, Walmart, GoPuff, Instacart and other high growth and relevant companies.
We are thrilled to lead their Series A alongside A16z and join existing investors First Round and Construct Capital. If you are excited about joining a mission-driven business that can do both very well and a lot of good, check out their open roles here. You can also sign up to become a member here using the code REDPOINT for a month of free refills!