Fashion tech startup raised funding round entirely over Zoom during Covid - Tech Insider

Fashion tech startup raised funding round entirely over Zoom during Covid - Tech Insider


Fashion tech startup raised funding round entirely over Zoom during Covid - Tech Insider

Posted: 26 May 2020 03:30 AM PDT

  • E-commerce platform Blackcart is set to launch later this month having raised $2 million in venture funding, solely over Zoom, during the coronavirus pandemic. 
  • The try-before-you-buy fashion startup has fast-tracked its launch process with Covid-19 closing physical clothes stores across North America.
  • "We were going to keep the platform in beta for a few more months, but then Covid came along," Blackcart founder and CEO Donny Ouyang told Business Insider in an interview. "We messaged all potential investors to fast-track the fundraising process to launch, it was five weeks of back and forth, 100s of emails and five or six meetings every day." 
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E-commerce platform Blackcart is set to launch later this month having raised $2 million in venture funding, solely over Zoom, during the coronavirus pandemic.

The try-before-you-buy fashion startup has fast-tracked its launch process with Covid-19 closing physical clothes stores across North America. The Toronto-based fashion tech company received funding from Struck Capital, who led the round, with participation from 500 Startups, Revel Partners, M3 Ventures. 

"We were going to keep the platform in beta for a few more months, but then Covid came along," Blackcart founder and CEO Donny Ouyang told Business Insider in an interview. "We messaged all potential investors to fast-track the fundraising process to launch, it was five weeks of back and forth, 100s of emails and five or six meetings every day." 

Ouyang admitted that the process of fundraising and onboarding new staff remotely was "strange," Blackcart is actively hiring ahead of fully launching its platform in the coming days.

The issue is simple, in order to help shoppers find the right item most retailers make returns free so that customers can find the right item. However, the process of mass returns is inefficient and hits the margins of retailers, particularly smaller merchants. Try-before-you-buy is one solution to that issue, but security is paramount.

To that end, Ouyang hired a scammer to attack the company's fraud detection systems to look for weaknesses or potential issues. As a result, Blackcart will "have the best card protection model on the market," according to Ouyang. 

"There is a trend away from bricks and mortar retailers because of the inefficiencies and the cost of rent for shops, Blackcart is part of this macro trend," Adam Struck, partner at Struck Capital. "It's hard to do a completely remote fundraising process with our superpower of picking up in-person cues removed, so we did an incredible amount of Zoom calls to work on this opportunity."

BlackCart's plugin will be available to all merchants including Shopify stores later this month. The company has powered tens of thousands of transactions while in beta — dramatically increasing retailers' online sales, according to Ouyang. Currently Blackcart has 40 merchants signed up and wants 50 by the time of launch. 

"Covid is changing try before you buy because everyone is online now whereas previously it was only 30% of sales," Ouyang said. "Our overall vision is that in the future people will only do try-before-you-buy and Covid will accelerate that."

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