Two Boxes Raises $3.2M for AI Returns Processing

Two Boxes, a Denver-based AI-powered returns processing platform for e-commerce brands and 3PLs, has raised $3.2M in funding led by Assembly Ventures, with participation from Peterson Ventures and Matchstick Ventures. The software guides warehouse inspections, detects fraud via AI image analysis, and boosts restock rates by 20%. The capital will accelerate AI features, enterprise adoption, and international expansion.

Reverse Logistics Draws Fresh Capital

The raise aligns with heightened investor interest in reverse logistics tech. G2 Reverse Logistics secured $9.6M seed in March 2024, while Continuum raised $4.1M seed in November 2024 per their announcement. Two Boxes differentiates by focusing on warehouse-level AI processing for 3PLs, unlike portal-centric rivals.

Returns Crisis Hits $890B

U.S. retail returns reached $890B in 2024, equivalent to 16.5% of sales, with fraudulent returns comprising 13-17% and costing over $100B annually. E-commerce return rates often exceed 20-30%, driving up reverse logistics expenses. Current manual processes lead to waste, fraud, and low recovery rates for brands and 3PLs.

AI Speeds Warehouse Inspections

Two Boxes digitizes returns handling with guided workflows, AI-powered image classification, and anomaly detection. This enables 2x faster processing, 81 NPS scores, and preventing thousands of units from landfills. Over 20 integrations with tools like Shopify, Loop Returns, and Happy Returns streamline operations for customers including Radial, Stord, and Cart.com.

Fraud Detection Locks In Margins

Unlike customer-facing portals from Loop Returns ($176M raised) or Happy Returns ($25M), Two Boxes targets post-receipt warehouse execution. Its platform automates accept/reject decisions and provides real-time dashboards. Customers report 3x more units processed and 15% higher returns revenue.

As Kyle Bertin, Co-Founder and CEO, noted:

"Returns processing is a critical, often underserved function in modern logistics."

Investors Bet on Supply Chain AI

Assembly Ventures leads with a focus on supply chain innovation, joined by returning investors Peterson and Matchstick, bringing total funding to $13M. This syndicate signals conviction in AI-driven reverse logistics amid surging returns volumes. The backers validate Two Boxes' traction processing nearly $1B in annual returned inventory across three continents.

$823B Market Scales to Trillions

The global reverse logistics market stood at $823B in 2024, projected to reach $3.18T by 2033 at 14.5% CAGR. Returns management software TAM hits $2.8B by 2030 per Global Info Research. Optoro ($200M+) emphasizes resale, while Returnalyze ($13.4M) focuses on prevention analytics.

Logistics Veterans Lead Charge

Co-founders Kyle Bertin (ex-Flexport, Outrider) and Evan Stalter (ex-Outrider, BYTON) met at Outrider, bringing ops and product expertise from autonomous logistics to returns workflows. Their team includes hires from Returnly (acquired by Affirm) and advisors from Shopify Fulfillment and Loop Returns. This domain fit supports scaling to enterprise retail and B2B.

Enterprise Push Gains Momentum

With deployments processing $1B in returns yearly and onboarding two 3PLs monthly plus one merchant daily, Two Boxes eyes deeper enterprise penetration via partnerships like Radial. Funds target AI enhancements and global reach beyond US and Canada.