Seel secures $17M round to infuse AI in customer product returns

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Product returns have been a headache for many e-commerce companies. Some have approached this in a creative way – for example, Amazon tied up with Kohl’s and Stein Mart for personalized returns, while PayPal acquired returns provider Happy Returns.

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Seal’s return option example. image credit: seal

Aiming to give merchants more control over this, Seal, which focuses on underwriting e-commerce returns, is leveraging artificial intelligence to create proprietary underwriting software that predicts the likelihood of a return as soon as an order is placed. Uses hundreds of signals, co-founder Jack Peng told Nerdshala via email.

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After the order is sold, the trader can add “Return Assurance” to that order and transfer the liability seal of the return. If the order is returned within the next 30 days, Seal, instead of the merchant, will pay for the refund, he said. Buyers can add assurance for a small fee at checkout to make the item themselves, as if the merchant isn’t offering a service, refundable.

“Traders typically won’t know their actual revenue until the return window expires six to eight weeks after the order is sold,” he said. “This means they often have to reconcile refunds, make financial improvements and adjust marketing plans for orders sold weeks ago. Instead, they pay a variable return assurance fee when an order is sold. Can, and can immediately lock in, net revenue and streamline a significant amount of revenue operations.

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US e-commerce market poised to become $1 trillion industry by end of year, Peng says 10% to 30% of goods returned, merchants continue to take financial risk of managing logistics .

He believes the big seal could one day write off more than $100 billion in returns and refunds annually as an industry grows.

The company has been around for two years, and while its private beta began five months ago, Peng said there are around 200 merchants using Seal’s software, ranging from boutiques to marketplaces. He said 20% of buyers are adding assurance to their orders, which translates to a 5% conversion lift for merchants.

seal

Seal team. image credit: seal

It’s now launching its Shopify app, buoyed by $17 million in Series A funding led by Lightspeed Venture Partners. Existing investors participating include Foundation Capital, Afor Capital and West Loop Ventures.

“SEAL sits at the crossroads between fintech and e-commerce, and both markets are growing rapidly with strong secular trends,” Peng said. “With Lightspeed in the background of Affirm and Justin (Overdorf) being an early and committed investor from Stripe, the round was a perfect fit. Seal a strong fintech brand in underwriting the way Stripe is in payments and Affirm is in credit wants to make

The new capital will be used to develop the team, strengthen the product and build its market-going strategy. He said Seal has raised $24 million so far.

Peng said the company grew from five to 25 employees in 2021 and is on track to double that in the coming quarters.

While the company focuses on e-commerce, Peng envisions creating a new category of risk underwriting for everyday consumer activities, for example shopping, working and playing online.

“We believe that high frequency, low severity will become the next big category in risk underwriting, and Seal is a leader in building that future,” he said.

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