Mike Rosenbaum has been in the tech startup game in Australia for more than 10 years now.
In 2004, he co-founded Deals Direct, one of the pioneering e-commerce deals sites in Australia.
After growing it to the largest e-commerce group in the country, with a $100 million turnover, Rosenbaum headed over to Silicon Valley to be inspired and find his next calling.
Here he “fell in love” with the sharing economy and discovered the market for co-storage back home in Australia.
“It feels like what e-commerce did 10-15 years ago,” he said.
And so Spacer was born.
Rosenbaum launched the business in October 2015 with a initial seed capital of $1.2 million.
But despite his experience, knowledge and networking on the Aussie tech scene, he said it didn’t make the first few couple of months after launch any easier.
“Getting initial traction for any startup is a challenge,” he said.
“On day one you’ve got a beautiful website, investment… a team of great people, but potentially not many customers.
“The first months are a real grind getting early adoption.
“But we go out and meet customers to get feedback, you have to really take on the learnings, modify the product, make the customer journey as seamless as possible.”
But he said big players in the sharing economy like Uber and Airbnb are good for business.
“At the moment there is a massive rise in adoption in the sharing economy thanks to players like Uber and Airbnb.
“They are building understanding and trust – all boats will lift with rising tide.”
Currently those making the most of the marketplace are younger people living in smaller living arrangements renting space from baby boomers or empty nesters, says Rosenbaum.
“The host can make an extra $3000-4000 a year renting out extra space, and younger families they can access that in their local area at roughly half the price of a traditional self-storage facility.”
Now, seven months in and continued month-on-month growth, the business has 750 active listings experiencing more than 15,000 site visits every month.
The company expects to have 1,500 active listings by June 2016.
Moving into Asia
With this success, it is also expanding into Asia’s $4 billion market, with Singapore, Hong Kong, and Tokyo first on its hit list.
Spacer says its an ideal market, “driven in part by tech-savvy startups, high density living and economic growth, which is fuelling a booming middle class with high disposable income and household spending. All of which, contribute to an ever-increasing need for storage.”
Spacer’s international expansion is supported by a new partnership with Costockage, one of the biggest peer-to-peer marketplaces for self-storage in Europe.
Through the deal the businesses will leverage each other’s networks and operational and marketing resources to fast track entry into new markets – Costockage focusing on Europe, Spacer on the Australian and Asian markets.
The companies have also indicated a potential co-investment in the future by drawing on shared investor networks.
“From day one, international expansion has always been part of Spacer’s growth strategy, especially into the lucrative Asian self-storage market which is ripe for disruption. Our partnership with Costockage facilitates this by allowing us to draw on each other’s market knowledge, resources and experience to launch into new markets,” says Rosenbaum.
Spacer is also planning to expand into new space verticals after noticing an early trend in those using the business.
“We didn’t necessary foresee small businesses using Spacer for storage needs,” says Rosenbaum.
“It’s filling a void for them, and a strong area of demand… They’re using it as a mini warehouse.”
Eventually office co-sharing, commercial space sharing and warehousing are also on the cards.
“[Those areas] present a huge opportunity to expand our offerings and increase the types of real estate we have listed on our platform,” says Rosenbaum.
“Our goal is to empower everybody to earn a secondary income from their unused space, whether this is a commercial property, or a shed in the suburbs.”