This recommerce site is tackling retail’s 8-billion-pound problem—returns—with buy-in from Jay-Z and Serena Williams

America is in an overstock and returns crisis. Every year 8.4 billion pounds of products are returned to online sellers, according to the National Retail Federation. The typical solution from retailers is to send the roughly 17% of their inventory made up of returns to a landfill, regardless of the condition of the products.

It’s a problem that sellers have little incentive to solve. Since dumping product can be written off as the cost of doing business in profit and loss statements, companies don’t invest in a complex reverse supply chain or inspect items for potential resale value.

But recommerce site Rebel just raised a $25 million series B round to fuel its work building a resale network for retailers—and the software to power it. The funding round was led by Jay-Z’s MarcyPen Capital Partners, which, alongside Serena Williams’s Serena Ventures was part of Rebel’s $18 million Series A raise in 2024.

Discount-retail veteran Emily Hosie—whose résumé includes time at Saks Off Fifth and TJ Maxx—says she launched the Toronto- and New York-based company to solve two problems while selling written-off products at a 40% to 70% discount. “The majority of returns are ending up in landfills and no retailers or brands want to talk about it because it’s not something to be proud about,” she says.

How does Rebel work?

At Rebel’s 300,000-square-foot warehouse in Kannapolis, North Carolina, the company processes more than 70,000 unique products a week—enough inventory that its website adds new deals every 15 minutes. To process that volume of returns, Hosie built a new technology and logistics stack. Using AI, Rebel can detect, log, and tag the condition of each return, and determine the most efficient way to receive it from retailers and ship it to consumers.

“Every return is a snowflake,” Hosie says, noting that all products require inspection to determine their condition. “(An e-commerce company) processing a return versus processing inventory in general is asking a heart surgeon to do brain surgery. It’s a totally different infrastructure needed, and for a lot of companies that’s just mission drift.”

Rebel, which is B Corp certified, aims to expand its physical presence on the West Coast in 2026. The company developed an AI-powered smart-pricing algorithm that auto-adjusts item prices based on demand, condition, and inventory more than 10 times a day. On top of that, Rebel’s consumer-facing tool lets buyers check the real-time resale value of an item when they’re deciding whether to purchase it.

Rebel’s business, which started processing items in the baby category with Newell Brands, Evenflo, Dorel, and others, has grown 2,640% in just three years. The site now also sells travel products and home goods (including mattresses), and is expanding to outdoor/sporting gear and eventually consumer electronics.

Getting retail’s attention

As complex as Rebel’s logistics are, for Hosie the biggest obstacle was getting retailers to buy into the product—in part because in meetings with retail leaders, they balked at the premise of Rebel’s service.

“We would get meetings with the most senior people on leadership teams at global iconic brands and mass retailers,” Hosie says. “They would look at us and say, ‘Congratulations on what you built, but we don’t have a returns problem.’”

The company had a breakthrough early on when a large mass retailer going bankrupt decided to use Rebel to sell off its inventory. “That gave us the business case to go back to other retailers,” Hosie says.

Unlike other retailers struggling with their supply chain as tariffs take hold, Rebel is immune because the products it deals with are already sold in the States. Rebel is also appealing to price-sensitive shoppers ahead of the holidays, at a time of layoffs and economic uncertainty.

“We’re the only company with the tech to be able to process these returns at scale,” Hosie says. “Why not be that one-stop destination for those who love deal hunting and buying open-box, never-used returns?”