A New York-based startup founded by a film producer aims to make moving less painless with a new app.
Zootly claims that with its new app, people and companies “can move anything, anytime, anywhere on-demand.”
Potential residential or commercial customers can either go to the Zootly website or download its app to schedule a move. Zootly pairs the customer with a professional mover – deploying vehicles and staff on short notice via the Zootly app. Residential or commercial customers can then track movers and trucks from their phones.
Zootly founder Rudy Callegari – who is also known for creating Bright Pictures – came up with the concept for the company when he was simply trying to move a sofa across New York.
“He found that moving a very simple couch was not a very simple thing,” said Zootly CEO George Colwell. “There were four-hour minimums or you had to book a week in advance. He realized there was an app for everything, but not an app for this.”
Under the hood
The company’s premise is that it aggregates underutilized moving vehicles and moving teams. By partnering so far with about 50 moving companies, Zootly also claims it has built the largest community of moving companies in the NYC metro area.
Currently, Zootly moves people or companies within a 100-mile radius of Manhattan with plans to expand to Canada and 15 U.S. states in 2016: Arizona, California, Connecticut, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Tennessee, Texas, Virginia and Washington. The company is targeting large urban areas, with populations between 3 and 5 million.
In December 2015, the company raised $2.5 million from a group of institutional and high net worth investors. In total the company has brought in $8.2 million in funding. Zootly is currently in the process of trying to raise more money.
The company is not just focused on moving.
It recently launched a new product – the Zoot case, which works by putting a modular system in place. The case is a patented moving and storage unit which allows a customer or moving company to pack the unit or multiple units lined up, lock them and transport them via standard moving trucks to another location or a storage facility.
At a storage facility, the Zoot Cases can be stacked and moved in the proprietary racking system. This allows for greater warehouse efficiency and significantly reduced damage claims.
“This can be especially useful in a ‘less than a truckload’ situation so that items can be stored and then moved on trucks that are already going somewhere,” Colwell said. “It’s convenient and more cost effective.”
Partnering with movers
Colwell said movers support Zootly because the service helps them reduce sales and marketing spend by bringing qualified moving jobs to them and filling their underutilized capacity.
In smaller markets, the company might explore a licensing model where it gives a mover a license and takes a small licensing fee. Under its current model, movers pay Zootly 25 percent of what it charges customers brought in by the app.
The company has a total of 31 employees, with 24 full-time workers and “a bunch of contractors,” Colwell said. After its next raise, it will be looking to hire – mostly sales and marketing staff.
“We think we’ve got a pretty stable development team and operational organization but on the sales and marketing side, we need to beef up in different jurisdictions when we go live,” he said.
Convenience is king
When it comes to competition like giants such as UHaul, Colwell said Zootly offers a better price point and the ability to spare people the inconvenience of picking up and dropping off a truck.
“Our on-demand model means that a truck shows up when you need it and goes away when you don’t,” he said.
Colwell points to an example of a commercial catering customer who repeatedly uses Zootly rather than renting trucks from larger competitors.
“The ability to rent per hour and per minute cut their transportation costs in half on weekends,” he said. The customer paid $100 for the first hour and then by minute thereafter.
“So not only was it more economical, their chef didn’t have to waste time going to rent a truck,” Colwell added. “So there were ancillary benefits.”
Another customer who does custom duct work has decided not to own his own truck or delivery vehicle.
“He Ubers it to the job site and uses our app to do delivery,” Colwell said. “He did the math and realized it’s cheaper to use other people’s assets.”
Zacks analyst Ian Gilson is so far skeptical about Zootly’s claims to be disrupting the moving industry and is more bullish on the company’s storage cases.
“The moving business is highly competitive and in many markets, discounted by significant amounts,” he said. “I’m skeptical of somebody that thinks they can get a 25% add in a highly competitive business.”
But when it comes to storage, Gilson believes the idea of a smaller storage container “is a good one.”
“A lot of people don’t want a 10 x 10 unit, so if the price is proportionately lower, they may not be averse to renting smaller containers and linking them all together,” he said.