Max Retail, an online marketplace for independent retailers that want to sell excess inventory, raised $15 million to grow the venture.
The startup's series A round was led by London-based Nosara Capital with participation from Rethink Capital, a venture capital firm known for investing in women-led technology businesses. VC M13, The Artemis Fund and StandUp Ventures were also investors.
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Many retail businesses are struggling with cash flow due to rising rent, inflation and changing consumer habits, said Max Retail co-founder and CEO Melodie van der Baan.
"[They] face limited options for their excess inventory other than discounting far below cost, sending to consignment, or donating for a tax write-off,” she added.
The West Palm Beach company will use the series A capital to double the number of sellers on its platform and focus on serving speciality retailers and brands. The company currently has more than 2,000 sellers on the platform.
Max Retail reports it has tripled seller payouts over the last year. Small retailers on the platform earn about $12,000 per year while larger sellers make over $250,000.
Unsold inventory is a major cause of stress for many retail businesses. Small retailers in the U.S. typically have about $48,000 of excess stock, according to a report from Inventory Planner, equal to about 22% of its overall inventory. The study found that 27% of independent retailers reported excess stock as a loss in 2022.
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Opening up distribution channels for unsold stock is even more important for small businesses as they face mounting competition from e-commerce brands like Amazon.
“We see Max Retail as a huge multiplier of our mission, making a meaningful impact on its customer base of 90% women-owned small businesses across all 50 states," said Jenny Abramson, founder and managing partner of Rethink Capital.
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