INSUBCONTINENT EXCLUSIVE:
The world of on-demand storage has seen some ups and downs, with some of the biggest hopefuls pivoting into new areas, some as unrelated as
cryptocurrency, in the search for better product-market fit
One that found its groove early on, however, is today announcing an acquisition to expand its existing business into a new market category
Clutter, the on-demand removals and storage company backed by SoftBank, is today announcing that it has acquired The Storage Fox, a startup
that will spearhead Clutter’s expansion in to self-storage services in urban locations, starting first in the New York metro area where
The Storage Fox is currently active.The deal is valued at $152 million, Clutter said
Ari Mir, Clutter’s co-founder and CEO, added in an interview that Clutter did not need to raise any extra funding to finance this
acquisition, but said his company is likely to be taking on more financing in the future for growth.To date, Clutter has raised $310
million, according to PitchBook, including a $200 million round earlier this year led by SoftBank that valued the company at $600 million
Future financing is likely to come in the form of debt to acquire property, as well as equity to expand the business’s platform, hiring
It’s currently active in 1,000 cities and towns across the US and the plan will be to stay domestic until it has wider penetration, before
exploring how to grow internationally
The deal will bring the total amount of space that Clutter leases and owns up to two million square feet.“Expanding into self-storage is
something we have been discussing since Clutter’s Series A pitch to Sequoia and we are excited to see it come to fruition,” said Omar
Hamoui, partner at Sequoia Capital, in a statement
“The acquisition reinforces Clutter’s market leadership and expands Clutter services by offering a better experience for customers who
need self-storage or on-demand storage.”(Notably, too, is that Clutter had to actively bid for this business: “Portfolios like that of
The Storage Fox are extremely rare, and this acquisition signals that Clutter is uniquely positioned to take on and succeed in the
self-storage industry,” said Eliav Dan, Head of West Coast Real Estate Finance at Barclays, which acted as Clutter’s exclusive financial
“Clutter competed with multiple self-storage REITs throughout the bidding process to win the deal — a testament to the strength of the
company’s management team and its ability to execute on an innovative business model.”)Up to now, Clutter’s business has focused on
extending the on-demand model — which has become a cornerstone for a huge wave of e-commerce startups that are tapping into new
innovations for managing logistics, the rise of the gig-economy, the proliferation of smartphones, and consumer tastes for instant
gratification — to the messy business of helping people move and store their worldly possessions, from which Clutter makes revenues by
charging service fees.Customers might typically be urban dwellers — for example moving to smaller digs or simply looking for a way to,
yes, de-Clutter — but the storage centers themselves tend to be far outside city centers
On top of this, Clutter has largely operated on a long-term lease model with the facilities that it uses.In that regard, this acquisition
will be giving the company a couple of interesting new possessions of its own, to tap the self-storage market, estimated to be worth $40
billion annually.The Storage Fox’s facilities, like other self-storage businesses, are located in areas that are much closer to urban
centers, since the model is predicated more on people being able to dip in and out of their storage units quickly and potentially very
In its case, its facilities today are in Yonkers, White Plains, Queens and Brooklyn.It will also give Clutter a trove of real estate that it
will now own: The Storage Fox didn’t appear to raise any traditional VC funding, but it did have large finance agreements in place in
That is a pattern that Clutter is likely to continue, Mir said.Now that there will be more accessible space on Clutter’s platform that it
actually owns, it will also give the company a point of entry into a new range of business services alongside self-storage
Could that extend into something like office space, potentially pitting Clutter against one of its portfolio neighbors, WeWork? Mir declined
to answer specifically but we’ve seen some outlier cases — such as this guy who lived out of his storage unit — that, while not
exactly okay for a number of reasons, does underscore that there is a lot of potential there.“There are over 52,000 self-storage
facilities in the US alone,” Mir said
“If you take all that and add it up, there are more square feet in those storage spaces than there are in McDonald’s and Starbucks in
At the same time, inside of cities, we’re running out of space
So our vision is to apply all the technology that we’ve built in house to increase the value that these self-storage facilities provide
across society.”Clutter has already made some moves beyond simple storage in its existing business: it’s already actively advertising
the option to rent, sell, donate and dispose of your items if you choose — although it seems that these four services are not yet actively
Earlier this year, it acquired the storage business of Omni, which itself is currently focusing on rentals.Storage overall has not been an
easy area to tackle for a lot of reasons: on top of the usual issues of needing to ensure that movers — the face and engine of your
business (and in Clutter’s case, W2’d employees) — are responsible and good at their jobs, the cargo can be unexpectedly large or
fragile, and the movement of it might be tied up in all kinds of backstories that make getting from A to B and eventually back to the owner
again very complicated.Mir concedes that the customer satisfaction aspect has been challenging, not least because it’s one of those areas
that people are quick to publicly complain about when something has gone awry
He also insists that Clutter’s ratings and efforts are generally improving
Frankly, it’s great to hear him be honest about this and not deny that criticism is a challenge and that the company is always working to
