Austin’s SpareFoot, ‘Hotels.com of Self-Storage,’ Gets $10M to Grow
As a college junior in 2008, Chuck Gordon was headed to Singapore for a study abroad program but, first, he needed to find a place to store his stuff.
Storage units near his school, the University of California at Los Angeles, were going to cost him about $1,000. “My dad told me he was not willing to pay $1,000 to store my junk that’s worth $100,” Gordon says.
He ended up splitting his belongings in two, storing half at a friend’s attic and the other half in his girlfriend’s garage. The experience got him wondering about ways to comparison shop to get better deals for self-storage. When he came back home, he and his friend, Mario Feghali, decided self-storage—a largely opaque market—could use a little reinvention through technology.
The pair developed inventory management software to create an online marketplace of the nation’s 52,000 self-storage facilities. Their company, which is called SpareFoot, currently has 7,000 facilities listed online and, on Monday, it announced a $10 million financing round from Insight Venture Partners in New York.
In total, Austin, TX-based SpareFoot has raised $26 million from investors such as Insight, as well as Silverton Partners and Capital Factory, both in Austin, and Palo Alto, CA-based Floodgate.
SpareFoot’s website seems easy to use; enter your zip code and a list of available facilities comes up. You can then sort by distance, price, or unit size. Each suggestion details whether the facility is climate-controlled or has roll-up doors or drive-up access, among other features. Each facility pays a flat fee based on the size of the unit rented in exchange for being listed on SpareFoot, Gordon says.
SpareFoot’s approach makes a lot of sense, compared to Googling “self-storage” in a particular location and then having to call each one separately to find out about rates and units available.
Gordon says he and Feghali came across SpareFoot’s business model accidentally. “We started out with the idea of renting personal space for storage, an Airbnb-for-storage idea,” he says, referring to his own search for space before his study-abroad trip.
That was at the end of 2008, just as the financial crisis took hold. But as they were building up their database of facilities, they noticed that many small mom-and-pop storage facilities were signing on, in addition to individuals. “They were desperate to find new customers,” Gordon says. “It seemed like a pretty strong demand.”
They decided to switch gears. “We’ve been booking hotels online for 10 years, and we can’t do this for storage?” Gordon says. Extending the travel metaphor, he calls SpareFoot the “hotels.com” of self-storage.
He and Feghali moved to Austin in 2009 to attend Capital Factory’s accelerator program and have since grown the company to 117 employees. With the new funding, they plan to more than double its call center staff to 50 by mid-summer, as well as beef up marketing efforts.
Gordon, who turned 27 on Monday, says his main concern is maintaining SpareFoot’s startup culture, even as it grows quickly. He’s proud of the “best places to work” distinction the company has received by local press.
“How do you keep it that great?” he says. “That’s what I’m focused on.”