Culver City, CA-based on-demand storage company Clutter has closed the nascent industry’s biggest funding round yet.
Investors are putting $200 million into the four-year-old company, which will enable the firm to rapidly expand into new markets across the United States. Clutter also says it will be “doubling down” on its existing operations in Los Angeles, New York, San Francisco, Chicago, Seattle, San Diego, Orange County and Northern New Jersey.
Softbank Vision Fund is leading the latest investment round, with additional participation from Sequoia, Atomico, GV, Fifth Wall and Four Rivers.
Co-founder and CEO Ari Mir makes it clear that the company full intends to compete for market share with the $38 billion U.S. self-storage industry.
“Now, we are capitalized to lead the creation of new infrastructure across the moving and storage space,” said Mir in a press release. “SoftBank’s investment is the ultimate vote of confidence. This puts us in a position to continue to lead the on-demand storage space and challenge the self-storage incumbents head on.”
Disrupting traditional storage
Unlike traditional self-storage, Clutter picks up their customers’ possessions and stores them in warehouses located outside of city centers. Clutter then redelivers the items when requested by the customer via their smartphone app.
Currently the company operates 1.7 million square feet of warehouse space where it stashes customers’ belongings. It has a fleet of more than 200 moving trucks and employs 500 people. Mir said in a Medium post that the company will use the latest investment to propel the company towards its goal of operating in the top 50 U.S. markets and expanding internationally.
“Before Clutter, the storage customer experience had been largely unchanged since the first self-storage facility opened in the 1960s. To store their stuff, consumers’ only option was to bear the burden of moving their items in and out of storage themselves,” Mir said. “If people don’t want to leave the house to pick up Chinese food, why would they want to spend their Saturday renting a truck and lugging their stuff to storage?”
The company’s investors also believe the traditional self-storage industry is ripe for disruption.
“We believe that storage is a vast and traditional market with huge potential for disruption, and Clutter’s technology and superior customer proposition will help facilitate future growth in expanding urban communities where space is at a premium,” said Justin Wilson, director at SoftBank Investment Advisers.
With the latest investment, Clutter has raised $297 million to date. The company says since its last round in June 2017, the company has more than doubled its revenue and number of customers.