A Startup That Solves A Major Problem For People Who Live In Cities Just Raised $8 Million

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MakeSpace founders

MakeSpace

Adam LeVasseur, Sam Rosen, and Rahul Gandhi, co-founders at MakeSpace

MakeSpace, an on-demand storage startup, just raised an $8 million Series A round.

During Hurricane Sandy, MakeSpace co-founder Sam Rosen had to help move out his girlfriend when her apartment got flooded.

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Mostly everything got destroyed. Everything they could salvage, they put in a storage locker in Hoboken, New Jersey.

That same night, Rosen says, there was a snowstorm. His girlfriend needed her snow boots, but she couldn't find what she had literally just packed away.

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That's when a light bulb went off in Rosen's head.

"Why couldn't we search for her winter boots, as opposed to tracking down the box that says 'Shoes,' and then having to dig through it," Rosen says.

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Last September, MakeSpace launched in New York to offer people cloud storage for their physical items. Just today, MakeSpace announced that it has raised an $8 million Series A round led by Upfront Ventures, bringing its total funding to $10 million.

Here's how it works. You schedule a pickup online or by phone, and a someone will drop off at least four bins at your door. Each bin is 27x17x12.5 inches, and can hold up to 100 pounds. Pack your bins, write a quick description, like "shoes," and notify someone to pick them up. MakeSpace then takes pictures of all of your items and scans each bin's bar code to create an online visual catalog of your items. You can order any of your items back for return within 48 hours for $29.

That may sound laborious, but Rosen insists that it will become easier over time.

"MakeSpace is continually streamlining, refining, and automating the technology around our photo process, making it increasingly easier to accomplish in a short time," Rosen says. "MakeSpace is also developing a feature in their upcoming iPhone app to give consumers the ability to catalog their belongings in even more detail."

The pickup service is currently live in New York, Hoboken, and Jersey City. But MakeSpace Air lets anyone mail belongings to MakeSpace, and then MakeSpace will send them back to you upon request.

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MakeSpace's service is significantly cheaper than Manhattan Mini Storage, for example. MakeSpace charges $25 a month to store four boxes worth of items. Manhattan Mini Storage, on the other hand, costs at least $70 per month.

"We pass along the cost savings of storing bins outside of NYC to customers," Rosen says. "We pay less for real estate outside of the city [in New Jersey] than we would in Manhattan, allowing us to keep our costs low."

But MakeSpace isn't the only startup trying to tackle the storage space. Boxbee, the winner of the Launch Festival, aims to make urban living more convenient by helping you save space.

"I think they're significantly smaller than us," Rosen says about Boxbee, which has raised just $2.3 million.

Just as Uber is widely seen as the dominant company in the transportation space, Rosen says, MakeSpace will be the Uber of the storage space.

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MakeSpace plans to launch its iPhone app next spring. In April, MakeSpace had a record-setting month, where it made more money than it did in all previous months combined.

"I view MakeSpace as reverse Amazon," Upfront Ventures General Partner and MakeSpace board member Mark Suster says. "Amazon blew up the distribution model of retail. It said, 'Do you really need to have expensive real estate near your house in order for you to get goods' and made it hard for local retailers to compete by having huge cost advantages. Because MakeSpace can store your stuff in a remote location, yet ship it to you at a moment's notice, we have huge scale advantages to the archaic physical storage infrastructure. It's a classic Innovator's Dilemma."

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Screenshot/MakeSpace