BuyWander, an auction-based online marketplace for returned and overstocked retail items, announced Tuesday that it has raised $21 million in a Series A funding round led by Madrona Venture Group and Inspired Capital.

The fresh capital comes on the heels of the startup relocating its headquarters from Spokane, Wash., to the Seattle area to tap into the region’s deep pool of tech and retail talent and accelerate its nationwide warehouse expansion.

Founded in 2023 by CEO Jordan Allen and CFO Brock Kowalchuk, BuyWander connects bargain-seeking shoppers with inventory from major retailers like Amazon, Target, Walmart, and Home Depot.

Bidding on all items starts at $1 in fixed seven-day auctions, with customers picking up their winning purchases directly from local fulfillment centers to bypass shipping costs. The new funding — which brings total raised to date to $28 million — will fuel technology investments and power nationwide market expansion following recent warehouse launches in Denver and Chicago.

“This is blue ocean right now,” Allen said in an interview with GeekWire. “Nobody’s really built an incredibly strong consumer brand in this retail return space — what we call the intersection of the weird meets the wonderful underneath this misfit inventory. These items deserve a second chance, and as people have to tighten up their wallets, we’re an incredible option for them to buy the things they want and love.”

BuyWander officially relocated its corporate headquarters from Spokane to the Seattle area in August, establishing its central hub out of Kent, Wash., where 45 of its employees are based. The startup initially entered the region with a cramped facility to prove out local demand, but recently upgraded to a 52,000-square-foot warehouse that can process three to five times more volume for local shoppers.

Across its expanding national footprint — which now spans eight fulfillment locations — BuyWander’s total workforce has surged to 325 people, with the vast majority working in intake, stocking, and customer service.

“Spokane was a wonderful place to start the company,” Kowalchuk said. “It was where we were living at the time, and we were able to get a lot of feedback very iteratively. But getting to the size where we are today and building out that leadership team really requires a little bit more talent density that Seattle can provide with deep roots in retail and deep roots in tech.”

Allen previously founded Stay Alfred, a Spokane-based short-term rental company that shut down in 2020, amid the pandemic, after expanding to more than 30 cities.

Behind the scenes, AI is now helping BuyWander process and list hundreds of thousands of unique items each month. Historically, manual data entry and poor photography created a bottleneck for resale platforms. Today, automated tools instantly identify returned products, pull in retail valuations, and generate detailed listings with a single click.

“There’s been a ceiling on this business historically because of the technology required,” Allen said, adding that AI now optimizes everything from auction scheduling to appointment bookings. “It feels like World War II and Star Trek at the same time and we’re merging these two worlds together.”

To better capture regional markets, BuyWander plans to increase facility density in key metro areas. In the Puget Sound region, Allen noted that traffic and geography often create a barrier between regional hubs, pointing to plans to open four to five warehouses across the greater Seattle area over the next few years to keep pickup convenient for local shoppers.

Beyond bargain hunting, the circular model addresses a massive environmental headache for retailers, who often dispose of returned goods simply because their systems aren’t built to re-process them locally.

Total U.S. retail returns reach roughly $850 billion annually, driven heavily by online shopping, where return rates hover near 20%, according to data from the National Retail Federation and Happy Returns. For retailers, processing a single return can cost between 20% and 65% of the item’s original retail price once return shipping, inspection, and restocking are factored in — making local secondary marketplaces an increasingly vital alternative to taking a total loss.

“Some of these brands and retailers were throwing this stuff away, and it just feels kind of criminal,” Allen said, pointing out how returned items often get trucked back and forth across the country. “You can buy a Seahawks jersey, and it gets returned in the mail back to Hebron, Kentucky, and ends up loaded up on a truck, ending up in Miami. The stars really align when the stuff can be sold locally where the demand already was to begin with.”

BuyWander’s expansion is backed by rapid operational momentum, hitting 400% year-over-year growth as it expands nationally. The platform now counts 50,000 active and winning customers who have saved a cumulative $200 million — averaging roughly $4,000 in savings per customer. Over the past month alone, the company sold nearly 500,000 unique items across its eight warehouse locations, with goods selling for an average discount of 75% off retail prices.

According to Kowalchuk, roughly 80% of the returned goods arrive in “appears new” condition with only minor packaging damage. About 80% of buyers are end consumers using the platform for everyday shopping, while 20% are local resellers — a customer base Allen says grows almost entirely organically, with nine out of 10 shoppers joining via word-of-mouth referrals.

The platform offers a sprawling, unpredictable lineup of products — having sold everything from electronic cow milkers, log splitters, and commercial ice cream machines to everyday staples like hair dryers and air fryers.

“It is probably one of the best product discovery platforms out there,” Allen said, predicting the company will eventually sell a bit of everything listed on the internet. “We’ll get hilariously fun items, like foam blasters right after spring break or 12-foot tall skeletons right after Halloween. That’s why it’s odd, and that’s why the deals are so good.”