Amidst a funding slow down, a company that takes care of storing your stuff just tripled its valuation.
And the entire deal only took nine days to close, says its cofounder and CMO Ari Mir.
Los Angeles-based on-demand storage startup Clutter is announcing a $20 million Series B round led by Sequoia. The venture capital firm had led its $9 million Series A in October, just five months before.
However, Mir insists that the new round wasn’t because the startup was low on cash. Instead, he could feel the market changing and he wants to push Clutter to profitability.
“The reason that we raised this round is that we saw that with this raise there’s an incredibly high likelihood that we can get to an operating profit without having to raise another round of financing,” Mir said. “Given with where things are going with the macro environment, we thought the best thing to do would be to reduce burn while pursuing growth as well to get this business to be profitable. Which is crazy, I know you never hear that, but I think we can do it.”
The cash will also help Clutter go head-to-head with companies like MakeSpace in a fight over who gets to store your stuff.
Both startups have the same “Uber for storage” approach. Customers can request a pick up to put their items in storage instead of renting a unit of their own. The items are photographed and put in an online catalogue as they’re whisked away to a storage facility. When a customer needs their winter clothes or their couch back, it’s as easy as a few taps in an app to select it to be returned to you.
Where the startups differ, though, is in what they can accept. MakeSpace accepts items that can fit in bin that can hold hold up to 40 pounds. Any larger items, like your suitcase or golf clubs, add an additional monthly fee.
Clutter started with the same box model, but quickly pivoted to take all sizes of objects using professionally trained movers.
“Your life doesn’t fit in a box. The hard thing to do is to move an eight-piece sectional couch or a marble table,” Mir told Business Insider back in October. “We pride ourselves on not necessarily doing what’s easiest for us, but with the goal of what’s the most convenient service for the customer.”
The startup has been growing revenue 35% month-over-month and that hasn’t been at the expense of margins, Mir says. While many on-demand companies are having their toes held to the fire over losing money on transactions, Mir is quick to point out that his storage is a better business because it’s not relying on people’s food cravings to turn a profit.
“Our entire book of business is subscription,” Mir said. “People keep paying for it.”