30 | FORBES ASIA OCTOBER 2017
Georgetown. The following summer Moore persuaded another
St. Albans friend who had just graduated from Brown, Adam
Vitarello, to back out of the job he’d accepted at AIG and help
run the business, which they’d named eSpot. (Vitarello is now
Optoro’s president; Lesher left the company in 2 011.)
For funding, they borrowed $350,000 on 3 7 zero-interest
credit cards. They got lucky with local press coverage and scored
some big sales, including a 19 65 Mustang and a $100,000 Rolex.
Neighborhood retailers started using eSpot to sell returns and
excess inventory. That led to a lightbulb moment. “We realized
big-box retailers had the same problem those small retailers
had,” Moore says. “We saw a massive problem that had no one
focusing on it and no good solutions.”
But Moore’s timing was terrible. In 2008 , the financial cri-
sis had hit and banks had hiked the rates on eSpot’s zero-inter-
est cards to 3 0%. Facing bankruptcy, Moore worked up an el-
evator pitch and started trying to raise money. He struck out
at more than 100 investor meetings in the D.C. area before he
landed his first angel, Nigel Morris, the cofounder of Capital
One Financial Services, who pledged $1 million through his
investment firm, QED, in Alexandria, Virginia. “Nigel liked
that we were lev eraging data and analytics to make chang-
es in an old industry,” Moore says. They hired three develop-
ers, who spent nearly two years coming up with a scanner and
software system, and in 2 010 they launched the new business
as Optoro.
Moore likes to talk about Optoro as if it’s the only compa-
ny to have mastered what’s known in business lingo as reverse
logistics (“There’s no technology platform that does what we
do”), but the Reverse Logistics Association, a trade group with
more than 100 members, has been around since 2002. Accord-
ing to RLA executive director Tony Sciarrotta, retailers and
manufacturers spread their business among numerous players,
many with niche specialties. Like Texas-based HYLA Mobile,
which takes returned mobile phones from manufacturers like
Samsung and retailers like Best Buy and sells them for big dis-
counts on the international market. In 2015 , FedEx acquired a
large Optoro competitor, Genco, for $1. 4 billion.
Confident to a fault, Moore regularly pitches Optoro at
RLA’s annual conference in Las Vegas. In 2012 , he signed his
first big retail client, BJ’s Wholesale Club, a Costco rival that
sells discount goods to members through its network of ware-
houses in the eastern U.S. The BJ’s contract helped Moore’s sec-
ond push to raise money. In late 2012 , he persuaded Grotech, a
D.C. venture firm, to lead a $7. 5 million investment, and seven
months later, Revolution Growth, the VC firm headed by bil-
lionaire AOL cofounder Steve Case, led a $23. 5 million round.
“This market is so big and will continue to grow,” says Revolu-
tion partner and Optoro board member Ted Leonsis. “It won’t
be a zero-sum game.”
A total of $ 12 9 million in investment capital has poured into
Optoro, including participation by Generation Investment Man-
agement, the London-based venture group cofounded by Al
Gore, whose managers liked Optoro’s pledge to keep merchan-
dise out of landfills, and a $46. 5 million round in December
2016 that included UPS, which plans to pitch Optoro’s business,
where appropriate, to its thousands of retail customers, says Ken
Rankin, the company’s director of corporate strategy.
Moore concedes that some companies, in particular Ama-
zon and its subsidiary Zappos, have effective internal systems
for processing returns. Amazon, however, has used Genco
(now called FedEx Supply Chain). Amazon also uses liqui-
dators to clear bulk merchandise from its warehouses. And
Amazon offers used and so-called open-box
goods directly on its site.
There is plenty of other reverse-logistics busi-
ness to be had, though retailers and manufactur-
ers don’t want to talk about it. They’d rather con-
sumers focus on acquiring new things and don’t
want to draw investors’ attention to the money pit
dug by returns and overstock in search of buyers.
Of Optoro’s 3 0 clients, only a handful, including
Home Depot, Best Buy, Target and Jet.com, per-
mit Optoro to make their relationship public, and
none would agree to an on-the-record interview
for this story.
Like his clients, Moore won’t share Optoro’s numbers, ex-
cept to say that he expects next year’s revenue to double this
year’s, which is on track to double last year’s, and that Optoro
will process goods with a total retail value of $1 billion in the
coming year. Optoro collects revenue several ways. Most cus-
tomers who use the software pay monthly licensing fees. When
it sells goods on Blinq and Bulq, Optoro takes between 1 5 %
and 5 0% of the amount it recovers for its clients, which ranges
from 2 0 cents to 70 cents on the retail dollar. Forbes estimates
Optoro’s 2 017 revenue at more than $50 million. With a grow-
ing staff of 22 0 in its headquarters in central Washington, D.C.,
and its contract deal with the 100-plus workers in its rented
Tennessee warehouse, overhead is substantial, and Optoro is
spending its investment capital on growth. “We’re not in profit-
optimization mode,” he says.
Moore is aiming high. Off the rec ord, he ticks off the names
of major retailers whose business he believes he can capture
and existing clients he thinks he can persuade to use more of
Optoro’s ser vices. “Our technology is highly valuable to people
who work on a massive scale,” he says. “If they put us in place,
overnight we can provide a ton of value.”FORBES ASIA
SALVAGE MAN
F“OUR TECHNOLOGY IS HIGHLY
VALUABLE TO PEOPLE WHO WORK
ON A MASSIVE SCALE. IF THEY PUT
US IN PLACE, OVERNIGHT WE CAN
PROVIDE A TON OF VALUE.”