With revenue growth five times that as the previous year, startup Neighbor has raised $53 million it will use to compete head to head with traditional self-storage industry stalwarts.
The Lehi, UT-based company offers a peer to peer platform for renting self-storage. Users can rent out extra space in their homes or offices using the platform. Neighbor collects a service fee of the rents collected. The average cost for renters is 40% to 50% cheaper than traditional self-storage.
The new investment round, reported by TechCrunch, was was led by Fifth Wall. Other investors inlclude new backers DoorDash CEO Tony Xu and StockX CEO Scott Cutler, along with returning investor Andreessen Horowitz. Andreeseen previously led the company’s $10 million raise last year.
Like the self-storage industry as a whole, the pandemic has been a tailwind for Neighbor as well. Neighbor claims reservations have increased sevenfold over the last 12 months with some storage hosts raking in up to $50,000 per year in passive income. Neighbor also works with landlords to turn vacant commercial property into storage space.
CEO Joseph Woodbury explained the explosion of demand to TechCrunch:
“If you think about it, fundamentally on the demand side, everyone’s moving out of these major metro areas like New York and San Francisco, and are moving to these more rural locations. All that moving activity has created a lot more storage demand,” Woodbury told TechCrunch. “In addition to that, people are just spending more time at home and cleaning out their homes more. And they no doubt need storage as a result of that.”
Neighbor will use the new capital to expand its network to new markets and increase brand awareness.