A New Standard in Online Shopping – our Investment in BlackCart

  • January 25, 2021
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At Origin Ventures, we like to invest in companies that make the world “the way it should be.” The average American family has a median checking account balance of $2,000 and younger generations have an average credit limit of <$10,000. Putting a hold down of even a few hundred dollars can meaningfully pinch the available credit or bank balance for wide swaths of Americans.

Enter BlackCart, which allows online shoppers to try items before they buy without paying upfront nor putting a hold on their payment method. BlackCart insures against fraud for the merchant by underwriting the transaction, instantly approving over  90% of consumers. Customers have seven days after receiving merchandise to try it out and are only charged for what they keep after the trial period. No more painful customer support calls or watching your credit card transactions waiting for a return to get processed.

Infrastructure for e-commerce is more important now than ever. And while the hype around the sector may make it feel like e-commerce has taken over, it still represents a small fraction of total retail sales: spiking from 11% to 16% in 2020. As e-commerce matures, eating retail share, the ecosystem around sourcing, manufacturing, consumer experiences, payments, deliveries, returns, and branding will grow.

Origin Ventures co-led an oversubscribed $8.8M Series A financing in BlackCart, alongside Hyde Park Venture Partners, Citi Ventures, 500 Startups, Struck Capital, and a number of strategic angels.

Origin Ventures has made many investments in the “Digital Native Economy” – products and services created by, or targeting, Millennials and Gen Z as a demographic. Digital Native generations expect to be able to find anything on the Internet and *try* anything on the Internet before committing to it. They were raised on a steady diet of freemium, free trials, and ad-supported platforms. Consumers already exhibit this “BlackCart” behavior by ordering multiple colors, sizes, or styles of a product with a plan to return most or all of the order. If they can walk into a Nordstrom and try on jeans, jackets, shirts, and sweaters without handing over their debit card, they will gravitate to brands that offer the same experience online.

Online merchants are bombarded with offerings to increase average order value (AOV) and conversions, but BlackCart actually delivers. On average, AOV with BlackCart increases by 51%, and conversion rate increases by 24%: shoppers add more items to their cart and keep more than they otherwise would have.

The secret sauce lies in BlackCart’s fraud detection algorithms, which weed out hucksters and bots trying to keep merchandise without paying for it. If fraud occurs, BlackCart eats the cost, insulating merchants from the risk.

BlackCart also offers an optimized checkout flow and communication experience for consumers, so merchants don’t have to worry about return logistics or items getting lost. The company integrates with all the major players in the exploding online storefront platform category, including Shopify, Magento, BigCommerce, and WooCommerce, making onboarding seamless.

Success stories like Trunk Club and Warby Parker show that at-home risk-free trials can work. Since launching, BlackCart has been swamped with demand from merchants. With this fresh capital, the company plans to expand its product and engineering teams and make investments in customer success, sales, and marketing.

For over 20 years, Origin Ventures has been primarily focused on “between the coasts” markets – investing in ecosystems like Kansas City, Cincinnati, and Pittsburgh. This marks our first investment in the Toronto ecosystem, one we believe has tremendous potential.

We’re excited to partner with CEO Donny Ouyang and the team at BlackCart as they make try-before-you-buy a new standard in online shopping.

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