Business Startups Venture

Not A Minimalist? Startups Will Gladly Store, Manage, And Deliver Your Items

If our civilization collapses and archeologists return centuries later to excavate our ruins, what will they make of our storage facilities? Will they see these compact cubicles stuffed with old furniture and memorabilia as a testament to our prosperity? Or will they see in our compulsion to store a penchant for procrastination and hoarding?

Perhaps they’ll guess at the truth: It’s a little of both. And no matter the reason, startups will gladly store it for you.

The Startup Bug Begins To Infiltrate Storage

Possibly because storage space is something we’re accustomed to filling up and forgetting about, the sector has historically been relatively untouched by disruptive startups. The prevailing business model – rent a space and then dutifully pay each month – is quite profitable for storage facility owners. Customers might not be thrilled, but what are the options? Get organized and pare down possessions? Get serious.

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Recently, however, we’re seeing more options arise for the storage space consumer. In the past year, a proliferation of startups have scaled up businesses providing services to pick up, organize, and even return items from storage. Altogether, storage-focused companies founded in the past five years have raised more than $170 million in venture funding, according to Crunchbase data. Most of that money was for rounds that closed this year.

By far the biggest funding recipient is Clutter, a Los Angeles-area company that just closed a $64 million Series C round. The four-year-old startup pitches itself as a tech-enabled storage company that lets people store extra stuff without having to leave the house. Clutter offers optional packing, pickup, and digital cataloging of all items. Customers can also pay to have their stuff returned at any time.

MakeSpace, the next-largest funding recipient, has a similar business proposition. The New York-based startup picks up items from customers’ homes, transports them to storage, and returns them upon request—all at a price it claims is cheaper than self-storage. The four-year-old company has raised $58 million to date, including a $30 million Series C round announced in April.

Others vying for market share include Trove, a storage service that works with professional movers, Closetbox, which picks up packed boxes and furniture for storage, and Costockage, a Paris-based peer-to-peer storage marketplace.

Filling In The Storage Gaps

Startups are seeking to capitalize on several perceived shortcomings in the traditional storage space model. In particular, entrepreneurs see a weakness in storage operators’ reliance on spaces in close proximity to where customers live. This means old-school storage providers are commonly forced to offer space in or close to pricey metropolitan areas, like New York City or San Francisco, which drives up operating costs. But with a new generation of storage startups, customers don’t transport their own items. That means warehouse facilities can be located where real estate is cheaper.

Secondly, storage startups recognize that the process of lugging stuff to and from a storage space is a hassle for most people. They are betting customers will welcome the opportunity to have someone else haul their belongings, especially if it’s cost-competitive with doing it themselves.

Moreover, delivery opens up a new revenue stream by charging customers to ship their items back from storage. Traditional storage companies don’t make any money if you come and reclaim your sofa.

Storage startups are also embracing digital media as a tool to keep track of physical goods. MakeSpace, for instance, offers to photograph each box in storage and transcribe any labels. Clutter takes things a step further by applying barcodes to each item being stored. To get items returned, customers go online, pick what they want delivered, and schedule a time.

As the new storage business models gain traction, we’ll see how people deal with the notion of paying to get their stuff back. From a business perspective, it seems appropriate to charge for returns. After all, digging something out of a storage bin and delivering it takes labor and resources. It also could be a subtle way of encouraging people to simply leave their stuff in storage.

It’ll also be interesting to see whether eliminating the need to physically bring your stuff to storage will lead to accumulation. Up until now, there have generally been two restraints on the cycle of endless storing: you had to figure out how to get stuff to your storage space, and you had to pay for it.

With the advent of concierge-style pickup and delivery, startups are working to remove that first restraint. Now all we have to do is stop thinking about that monthly storage bill, and we can just keep piling up stuff.

Illustration: Li-Anne Dias

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