The Rounds secures multi-million funding to accelerate refill innovation

26 Aug 2024 --- The Rounds, an inventory management platform specializing in the delivery of grocery and household essentials in reusable packaging, has raised US$24 million in a Series B funding round to slash packaging waste. 

The round was led by Moderne Ventures, with additional participation from FJ Labs and existing investors, bringing the company’s total funding to US$66 million.

This investment will fuel The Rounds’ business strategy, which includes scaling its AI-powered service and expanding its team in machine learning, data science and executive leadership. The company is also set to launch in new markets, while focusing on achieving profitable growth in existing operations.

Alex Torrey, co-founder and CEO at The Roundsdxdx, says: “Sustainability has been at our core since day one. According to the EPA, more than 82 million tons of packaging waste is discarded every year and less than 10% is recycled. Waste is just bad design.” 

“The Rounds creates a better experience for our members that wastes less than the alternatives. To date, we’ve saved over one million pounds of packaging waste, proving sustainability does not have to come at the expense of convenience.”

Since its Series A funding, The Rounds has made strides toward market profitability, recording a sixfold increase in revenue. The company has opened a “state-of-the-art” facility in Washington DC, US, launched cold chain operations and enhanced its closed-loop supply chain through partnerships with local vendors.

Sustainability at the core

The Rounds’ business model emphasizes sustainability by sourcing products locally and in bulk, then refilling them in reusable packaging. Deliveries are made on a weekly schedule to members through the company’s proprietary two-way last-mile logistics network. 

“By applying machine learning to provide smarter predictions on when everyday items in your home need to be refilled and sharing personalized product recommendations, The Rounds offers a better solution for managing your recurring essentials. We’re breaking the mold of quick commerce with a sustainable path to profitable long-term growth,” says Torrey.

Recently, The Rounds introduced AI-enabled features that offer members more flexibility, such as the ability to choose their own “Refill Day” and add products one time or manage products on a recurring basis with the “Psychic Home Manager” feature. 

The zero-waste refill and delivery service lessens consumers' carbon footprint.Additionally, the company has expanded its product selection with over a hundred new SKUs, including fresh produce, local goods, household staples and increased transparency around its sustainability practices.

“Our goal is to continue to enhance member satisfaction with a service that provides smarter recommendations, is tailored to your schedule and allows you to easily see the positive environmental impact of your purchasing decisions that reduce your waste at home and support local businesses in your community,” Torrey continues.

Ongoing development

Strategic partnerships are also a key focus for The Rounds as it scales. The company plans to collaborate with multifamily property managers, a move that aligns with its decision to partner with Moderne Ventures. 

“The Rounds is addressing a huge pain point for city dwellers by enabling them to restock household essentials and get trusted local brands delivered with unparalleled convenience and less waste,” says Liza Benson, partner at Moderne Ventures. 

“Our strategy at Moderne is rooted in connecting our portfolio companies with top real estate companies to create outsized returns. We are excited to work with The Rounds and multifamily partners to bring this valuable amenity to many more residents.”

To support its continued growth, The Rounds has also strengthened its board of directors by adding Gad Allon, a professor at the Wharton School of Business and director of the University of Pennsylvania’s Management and Technology program.

“The Rounds exemplifies the critical intersection of tech innovation and operations, which is essential for the future of last-mile logistics to be sustainable,” says professor Allon. 

“By leveraging AI to optimize operations and reduce waste, The Rounds is not just scaling its business but is also setting a new standard for sustainable growth and efficiency in two-way last-mile logistics. I am excited to join the board and contribute to a mission that aligns with my research on scaling operations in tech ventures and linking strategy with execution.”