71lbs.com, a Fort Lauderdale-based startup that helps businesses save money on shipping, has closed its seed round of $500,000 with investors including The Pritzker Group, OCA Ventures, Idea Fund Partners, Excelerate Labs (now TechStars Chicago) and Tamiami Angel Fund I, said Jose Li, founder and CEO.
After 15 years in the shipping, logistics and e-commerce industry, Li saw the differences between how large shippers operate, with their million-dollar budgets, tools and resources, and how small business lack the knowledge, information or tools to handle their shipping and logistics in an efficient manner. Li, 41, who moved to South Florida three years ago, had worked both sides of the table, first as a shipper with Jamba Juice in San Francisco and then as a carrier, running the e-commerce practice for FedEx in Tennessee.
Many small businesses are unaware of refunds they are entitled to or don’t have the time or resources to track down the refunds if one of their packages is late, even by 60 seconds. “We believe in democratizing shipping,” Li said.
Launched in 2012, 71lbs offers a "set-and-forget, then collect" system that allows companies to automatically collect on the $2 billion a year in unclaimed FedEx and UPS late shipping refunds, Li said. “We provide tens of thousands of dollars every month in refunds to our 300-plus customers.” 71lbs developed a platform that tracks deliveries, automatically files claims when shipments are late and makes sure the refunds are credited to the clients' accounts. There are no upfront or subscription fees; If a refund is credited, 71lbs is paid half, typical of other cost-recovery services.
To rapidly expand its reach, the company has launched partnerships with Etsy.com, BigCommerce.com, US Messenger and other companies that service thousands of small and medium sized businesses and is actively pursuing others, Li said.
Li spent last summer in the prestigious accelerator Excelerate Labs, now TechStars Chicago (accompanying photo shows Li pitching at Excelerate's DemoDay). Although some mentors and potential investors suggested he stay in Chicago, he wanted to move back to South Florida to build the company here.
With the venture-backed funding, 71lbs intends to scale its customer acquisition program and grow its team of four. Additional shipping technology products are in the pipeline, Li said. 71lbs was recently featured in Entrepreneur, and it is already hiring. The company is advertising for a software engineer and plans to hire a salesperson and a marketing expert.