Many changes have occurred in the world of on-demand storage. One of the companies that found its productivity early on has now announced an acquisition to expand its business. Clutter is the popular online storage company with backing from Softbank. Today, the company is announcing that it has acquired The Storage Fox, a startup that will help with the expansion of Clutter, beginning from New York where The Storage Fox is popular.
The value of the current deal is $152 million. Ari Mir, the CEO of the company, made it clear that Clutter didn’t raise any extra funding for the acquisition. Another popular company, Huboo, had a funding round earlier this month in which it raised $1.2 million.
Until today, Clutter has raised $310 million, according to PitchBook. This also includes a $200 million round at the start of the year led by Softbank that increased the company’s value to $600 million. Future financing will come in the form of debt, as well as equity to expand the platform. It is functional in 1000 cities in the U.S. and the plan is to stay domestic before the global expansion. The current deal will increase the total space that Clutter owns to two million square feet.
Omar Hamoui, the partner at Sequoia Capital, said in a statement, “We have been discussing self-storage expansion since Clutter’s Series A pitch to Sequoia and we are very happy to see the results. This acquisition reinforces Clutter’s market leadership. It also expands the overall services of Clutter by giving a better experience to customers who require on-demand storage.”
Until today, the focus of Clutter’s business has been to extend the on-demand model. It has become a cornerstone for many e-commerce startups that are looking into innovations for managing logistics, consumer taste for gratification and the proliferation of smartphones. The company generates its revenue by charging a service fee to help people manage and store their possessions.
Most of the Clutter’s customers are urban dwellers. However, the storage centers are outside the city. Moreover, the company has operated on a long-term lease model with the different facilities it uses. Therefore, the current acquisition would give the company interesting possessions. Statistics have shown that the self-storage market is worth $40 billion annually.
Storage Fox’s facilities are present in areas that are closer to the urban centers because its model is based on people being able to move their storage quickly and regularly. The facilities of The Storage Fox are located in Brooklyn, Queens, White Planes and Yonkers.
This acquisition will also give Clutter a huge real estate. The Storage Fox didn’t raise any VC funding. However, it had big financial agreements in place to buy a property. Mir said that his company would continue on the same pattern.
Now, Clutter’s platform has a more accessible space than it owns. Therefore, this will allow the company to enter into other businesses alongside storage. It could also expand into something like office space. Mir declined to answer the specific business that the company is going to target.
“There are more than 52,000 storage units across the U.S.,” Mir said in a statement, “If you add this number up, there are more square feet in storage spaces than in Starbucks and McDonald’s combined. Meanwhile, we are losing space inside the cities. Therefore, we aim to apply technology to increase the value of these storage houses.”
Clutter has already made some moves beyond storage in its business. It is actively advertising the options to rent, donate, sell and dispose of your items. However, these services aren’t active right now. At the start of the year, the company acquired Omni, a storage business that focuses on rentals.
Mir accepts that the customer satisfaction aspect has been quite challenging. The main reason is that people defame the company publicly if something goes wrong. He also stresses that clutter’s ratings and efforts are improving.
