We are excited to announce that Matchstick Ventures Fund III has completed an investment in Frate. Frate is a returns solution for ecommerce retailers and consumers that decreases costs and emissions associated with each return.

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For retailers, returns are more expensive than ever. While every retailer wants to provide a positive returns experience for their customers, the fact is the returns process eats away at profits and efficiency. Over $216 billion worth of e-commerce goods were returned in the United States just last year, with the expectation for that number to rise to $1 trillion by 2030. 

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Not only do returns cost companies time and money, they also add waste and carbon emissions to our environment. Over 16 million tons of carbon dioxide was emitted from return shipping trips in the United States alone in 2021. With this in mind, both retailers and consumers are looking for better solutions when it comes to returning goods.

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Frate is a peer-to-peer returns solution that is making the returns process dramatically more efficient. With Frate, instead of blindly shipping perfect condition returns back to warehouses, retailers can ship returns between customers, decreasing the costs and emissions associated with each return. When this process takes place, retailers are turning what would have been a return into a new sale.

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Frate incentivizes customers to hold onto their product for a short period of time while the item is relisted back on the retailer’s store at a discount, called an “EcoDrop.” If the product is purchased within the hold period, the returner skips the warehouse and ships their item directly to the next customer, eliminating re-packaging costs, shipping label costs, warehouse labor, packaging waste, and shipping emissions. 

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Through Frate’s algorithm, every step of the process is optimized including incentives for holding onto return items, as well as discounts needed on the re-listed items to increase the likelihood it’s purchased. Frate is also working to build a strong brand around EcoDrops, educating consumers on the wastefulness of the status-quo returns process, and soon-to-be offering loyalty points that can be redeemed at partner stores. Frate’s goal is to make peer-to-peer returns the norm, and forever change the way we return to save retailer profits and our planet. 

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Our interest in Frate came through an introduction from our friends at 2048 Ventures, who know of our long-held interest in this space. Previously, Matchstick Ventures has invested in TwoBoxes and Treet, both companies focused on solutions for the returns industry. This interest was sparked first by Ryan’s experience in the Techstars Retail Accelerator with Target, and seeing first-hand how large of a problem this area is for retails with few current solutions.

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After getting to know the team at Frate, and seeing our matched interest in this industry, we are excited to participate in the round and work towards sustainable solutions for retail returns.

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