Logistics startup Two Boxes raises $5.3M in funding to tackle e-commerce returns

It’s been a year since Two Boxes made its debut to simplify returns and help brands and 3PLs gather essential data from the process. At the time, the Denver-based logistics startup launched with $4.5 million in seed funding, aiming to solve the challenges of e-commerce returns.

Today, Two Boxes announced it has raised $5.3 million in an oversubscribed round led by Peterson Ventures. The funding more than doubled the company’s valuation, with new investor Assembly Ventures joining, alongside continued support from Vinyl, Range Ventures, and Matchstick Ventures.

The fresh capital infusion will enable the company to expand its engineering and go-to-market teams, as well as extend its reach beyond North America. This increased valuation highlights the market’s confidence in Two Boxes and the value they bring to their clients.

While the average e-commerce return rate varies depending on the industry, product type, and other factors,  a study by the National Retail Federation (NRF) found that the average e-commerce return rate is 16%.

In recent years, however, e-commerce returns have surged with the NRF estimating $816 billion worth of retail merchandise was returned in 2022. On average, for every $1 billion in sales, retailers face $165 million in merchandise returns, much of which ends up in landfills. Two Boxes aims to change that by helping brands and 3PLs handle returns more effectively and capture key data throughout the process.

While many solutions focus on moving items back to the warehouse, Two Boxes stands out by addressing what happens once those returns arrive — a traditionally complicated and manual operation. Their platform helps brands and 3PLs streamline inspection, prioritization, processing, and tracking, tackling a range of challenges with a more intelligent approach.

Founded by Kyle Bertin and Evan Stalter, Two Boxes was created to provide a smarter, more efficient way for 3PLs and e-commerce companies to handle returns. The startup has also brought together an advisory board of industry veterans with experience from Amazon, Shopify, Whiplash, Loop Returns, and Rent the Runway.

Recent innovations from Two Boxes are helping brands and 3PLs tackle return fraud, a growing concern in the industry. By improving returns management and speeding up restocking times, Two Boxes boosts profitability, supports sustainability efforts, and reduces waste.

“Across our portfolio of ecommerce companies, we see firsthand how damaging high return rates can be to a business,” says Taylor Jones, partner at Peterson Ventures. “Two Boxes optimizes what has always been a labor-intensive process while providing data insights that unlock further efficiencies. We are excited to support Two Boxes as they continue to innovate, expand, and become invaluable to the logistics and e-commerce sectors.”

In addition to the funding, Two Boxes’ momentum continues to build on its success. The startup recently partnered with Loop and Happy Returns, a UPS Company, and now supports over 20 3PLs across North America, including major players like Capacity, Flowspace, and GoBolt.

Clients have quickly seen the value in Two Boxes’ solution, with a 100% pilot conversion rate and every 3PL testing the software expanding their usage within 90 days. Reported benefits include an 80% reduction in employee training time, a 50%+ boost in efficiency, a 15%+ increase in returns revenue, and complete visibility into vital metrics.

Since launching their product, Two Boxes has processed over $100 million in returns for more than 120 merchants, including brands like Caraway, Made In, Tecovas, The Perfect Jean, and Thursday Boot Company.

Two Boxes founders: Kyle Bertin and Evan Stalter