Online shopping and express delivery through services like Instacart and Amazon Prime are the pinnacle of modern convenience, but for many consumers who are concerned about sustainability and the impact of e-commerce on the environment, every box and plastic bag deposited on their doorstep is also accompanied by guilt. If there was a better way to just shop, we collectively wonder when we hit Add to Cart again. Well, maybe there is.
startup called Tours It believes it has come up with a solution to make online commerce more efficient, greener and – as the newly announced $38 million Series A indicates – it can also be profitable.
Investors Annie Kadavi of Redpoint Ventures and Andrew Chen of Andreessen Horowitz led the latest round of startups, which included core investors Construct Capital and First Round Capital. To date, The Rounds has raised $42 million.
The model that The Rounds uses includes what it calls reverse logistics – a system in which not only goods are delivered online to the consumer, but their empty containers are also picked up at the same time. On top of that, there are regularly scheduled deliveries designed to restock essential household needs, from cleaning supplies to personal care items to foods that can’t be stored on the shelves and more.
Co-founder and CEO of The Rounds Alex Toure He came up with the idea as a way to solve his own personal pain point as a big-city resident for a decade living in high-rise apartments, without a car. Like many city-dwellers, he either found himself carrying bulky big produce to his apartment after going to a local store or feeling wasted as he restocked small household items via online orders as things ran out.
Talking about the difficulties of using traditional e-commerce sites for everyday needs, Torey recalls, “I remember ordering hand soap…and having to sort through thousands of options on Amazon.” Then, when his package arrived, Tori realized how wasteful Amazon deliveries can be.
“I got a box within a box with a plastic bottle of hand soap – similar to the one on my sink. Now I’m carrying two identical plastic bottles, [but] One of them is empty. The plastic is designed to last hundreds of years — and my work didn’t even last 100 days,” he says.
He says this system didn’t make sense.
Combined with the fact that he was living in a building with another 500 condominiums where it is likely that many other people were also ordering hand soap and other items on a regular basis, it also doesn’t seem like the most efficient way to restock supplies either. After all, a hotel of this size would only order large quantities, without the overpacking designed for retail shelves. So why can’t consumers order this way, too?
As it turns out, they can.
Launched in 2019 in Philadelphia, it still flies a bit under the radar, Tours Today it works by allowing consumers to shop around 150 individual products (SKUs) across categories such as homeware, personal care, pantry goods and dry goods, as well as items from select local vendors such as bakeries, coffee roasters or other products you might find at your home local farmer’s market , according to the site.
Consumers sign up for the service, which does not charge an annual fee, and then create a restocking schedule for their weekly deliveries.
But unlike many subscription-based delivery services, The Rounds allows customers to continuously adjust which items are delivered and when they are delivered. Its system will send you a text message before delivery to remind you to check the orders dashboard, where you can add or remove items. You can also text back just to make your changes, similar to texting an Instacart shopper.
This is a huge improvement over basic restocking systems like Amazon’s “Subscribe and Save” system, which asks consumers to anticipate the expected rhythm of reordering, often causing them to experience overstocking or shortfalls as a result.
And while it shares some similarities with something like sustainable product retailer Grove’s monthly subscription-based deliveries, it delivers its merchandise weekly in reusable bags—and most importantly, the company picks up empty containers and bags to use for deliveries. In the future. (After cleaning of course!)
This is not an uncommon model – milk used to come in glass bottles, and be returned at the next delivery, for example. It has just ended with the emergence of supermarkets to serve those who They were moved to the more widespread post-WWII suburbs. And now, everyday e-commerce is a competitor to this model. But traditional e-commerce has been particularly harmful to the environment, despite improvements in last-mile logistics and recyclable cartons. Items still come with excess packaging – plastic packaging materials and extra packaging – things that often just get thrown away, not recycled.
Additionally, Tori states, “It”scale downReuse, recycle. recycling is worst option,” he says.
“With The Rounds, we’ve created a way you can get [items] Without any packaging waste. You can have it without cardboard or single-use plastic. We are building what we believe is the future of last mile logistics.
The startup’s e-commerce site is also leveraging technology to help consumers make better estimates about their restocking needs.
Using the online dashboard, shoppers move items between the columns labeled “Now,” “Coming Soon,” and “Later.” “Now” deliveries are the ones that come this week and can be modified by the consumer or by the system’s own algorithms as it learns from scheduled pickups. As you scan QR codes for your return containers, The Rounds learns how often you actually pass by a particular product.
Members pay $10 per month, but deliveries do not require an additional fee or tip. Individual item costs are comparable to Costco or other warehouse stores, the company claims, but are broken down into smaller sizes.
That might be a hurdle for some, however. Warehouse Club shoppers will at least get a full box of produce, unlike The Rounds, where, for example, you might get half a box of cereal or pasta delivered in a refillable mason jar. This can be more difficult for larger families, as ordering quantities to feed both parents and children can leave many empty jars for customers by the end of the week.
It may also not provide savings on this scale either.
“It’s not the cheapest option,” Toure admits. “We are not saying here that we are cheaper than anything else you can get. This is not our value proposition.”
Launched in Philadelphia, The Rounds expanded to DC, Miami, and Atlanta over the course of 2021 and 2022. It now has over 10,000 active members and claims 10-fold growth. While Tori won’t reveal annual revenue for The Rounds, he notes that it’s already profitable in terms of unit economies over individual delivery.
To help in this regard, the company has a number of residential construction partners that have allowed it to gain rapid density as it enters new markets.
“There is no secret. It just comes from the fact that our model is more efficient in terms of delivery because we collect the order,” explains Tori. “We don’t send someone from DoorDash to deliver one to your apartment building, and then they have to go to another restaurant and go to deliver something else to another apartment building. That’s too expensive. It’s very few deliveries per hour,” he says. ‘ With a big trailer behind their e-bike full of deliveries.”
The Roundup can also deliver directly to customers’ doors in many buildings due to its partnerships.
Now, the company is also beta testing deliveries with GM-owned electric truck maker Bright Drop To see if it could become more efficient by using trucks designed for last-mile deliveries.
Tori himself has taken an interesting path to entrepreneurship, having been drafted out of college at the CIA where he worked as an analyst and spent time in Afghanistan – an experience he is credited with teaching him what it’s like to be on a mission and work with a small group of people. Later, he booted a Consumer startupUmano, all the way to shark tank, which he says was a learning experience in which he made a lot of mistakes. Then he entered the world of marketing agencies, where he led the branding strategy of big companies like McDonald’s, but he could not get rid of the error of entrepreneurship.
Thanks to a supportive partner, Torrey decided to take another stab at him and entered the Wharton School of Business, where he met his co-founder. Byungwoo-koo. Kuo’s background is helpful to The Rounds, as he previously worked for Uber and Uber Eats on the operations and strategy side.
The founders have now expanded The Rounds to four cities and 10,000 customers with just 100 full-time employees, including delivery staff (all W-2 employees, not temporary workers, we’re told).
With its new funding, The Rounds is now looking to grow its team, particularly on the technology side, as well as its market penetration, including by delving into its existing markets and expanding into new geographies. In the long term, it aims to make a footprint in both major US cities and suburban markets as well.
While the startup’s mission is impressive, The Rounds still has to contend with a difficult economy where not being the cheapest option could hurt its ability to grow, and where a large portion of its existing client base of urban dwellers is comfortable. One-click orders with Amazon Prime. They may also have difficulties convincing families to join, since their current product volume appears to be more designed for a 1-2 person household. Because it’s not a full-service grocery delivery service, people may prefer placing only one weekly order with a larger provider, such as Shipt, Walmart, or Instacart, rather than having a separate service for basic and packaged goods and one for fresh dairy, meat, and frozen products.
The courses will also need to convince more than just environmental thinking of their value, which will come down to product quality and variety – something that could improve over time with more local business partnerships, including those likely with local product providers at some point further. off the road.
(Plus, consumers will have to trust that the startup isn’t just working on Costco itself and then moving products into Mason’s receptacles for sale! The company says it’s working with US distributors for inventory — it doesn’t shop from retailers on consumers on behalf of About other grocery delivery services.)
Torey admits that the next struggle will involve persuading these customers to offer the value while also reaching more people than it is today.
“This is our mission: to make everyday sustainable choices easy – because we are more convenient and have zero waste, the way we deliver and no packaging. And for ‘everyone’ this means not only that we need to be physically able to serve you, but also the idea of keeping on a really high offer value,” he says. “This is not a premium service; this is just a high value service.”
Now is the time to see if more consumers will agree.