Summary:

San Francisco-based Coveroo secured a round of Series B funding for $2.3 million today. Coveroo produces personalized covers for smartphones and the iPad through licensing deals with organizations like the NCAA, MLB and movie producers. Personal artwork can be used for custom cases which is unique.

Coveroo iPad case

San Francisco-based Coveroo secured a round of Series B funding for $2.3 million today. The round was led by Rembrandt Venture Partners who also led the funding round in 2009 for Coveroo. The company plans to use the new funding to expand its online smartphone case business and develop an in-store kiosk side of the operation.

I wanted to find out exactly what Coveroo does and spoke with founder and CEO Karl Jacob this afternoon. The company has 11 employees in San Francisco that produce custom cases for the hottest smartphones, like the iPhone 4. Coveroo produces personalized covers for smartphones and the iPad through exclusive licensing deals with organizations like the NCAA, MLB and movie producers. In addition to the extensive selection of logos and artwork available to consumers on its web site, Coveroo has the ability to take any customer’s artwork (within reason) and use it to create a personalized smartphone cover within 48 hours.

Coveroo doesn’t imprint the cover with artwork until a customer orders it online, which gives them an advantage with inventory. Jacob said the company doesn’t have to worry if a particular logo or design will sell, as they don’t create an inventory that is at risk. The cases are created with an automated system using laser etching and a proprietary color bonding method that makes the artwork part of the case. It is impervious to scratching due to the creation method.

There are over 3,000 designs in the Coveroo online selection, and given the number of different device cases available, there are over a million SKUs in the company database. This is impressive for a young company, and one without inventory concerns, which is attractive to investors. Orders placed online from the company portfolio of designs can be filled in 20 minutes according to Jacob, while the orders using customer supplied artwork take 48 hours. Most of that time is devoted to preparing the artwork for the Coveroo case imprinting.

The company looks to expand the in-store kiosk side of the business. Jacob couldn’t comment on specific deals but trials have been run successfully and discussions are ongoing with retailers. One of the trials was part of the “live event” operation, and involved a kiosk at the Despicable Me movie premiere in Los Angeles. Coveroo had phone cases at the premiere with artwork from the movie. There is also a corporate operation that can put company logos on cases for companies wanting to offer schwag.

The Coveroo case for most phones is comprised of a replaceable back for the phone that is exactly like the original. The company works with phone OEMs and usually has cases ready to personalize prior to the phone launch, otherwise within a few weeks after the phone is available on the market. For phones that do not have a user replaceable back, like the iPhone 4, Coveroo works with third-party case makers to build form-fitting cases that can be customized. This might even solve that pesky iPhone reception problem.

Most cases are in the $35 range, and Jacob says some customers will get one with a favorite sports team logo, and then a second case for a second team when the sports season changes. That’s a lot of coin for a phone case in my book, but team support is obviously worth it to some. Mr. Jacob’s favorite case design? He was embarrassed to admit it (I don’t know why) but the logo for his alma mater, USC.

Related research on GigaOM Pro (sub. req’d): To Win In the Mobile Market, Focus On Consumers

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