Neighbor Raises $53 Million as Startup Taps Into Self-Storage Boom

By Thomas Price Wednesday, March 24, 2021

While many different areas of the traditional real estate business have struggled during the economic hardships brought on by the COVID-19 pandemic, self-storage has found ways to succeed. With more properties left vacant, new storage startups and companies have begun utilizing the space for a growing market of customers looking to store their own belongings. Neighbor is a self-storage startup company built to create a safer, cheaper marketplace for consumers in the self-storage market. Alongside a major boom in business, the startup recently raised major funding in their Series B round.

Woman packing moving boxes.

Neighbor’s Business Model and Early Success

Neighbor is a self-storage startup based in Lehi, Utah, that has taken advantage of the many different vacant and underused properties all over the United States (US) to provide cheaper, safer storage areas. The startup works on a person-to-person business model, connecting customers with people willing to rent out portions of their own property for storage along with other such spaces.

This in turn allows for the actual storage locations to be much closer to the consumer instead of working under a traditional model where large storage properties are usually in cheaper land farther away. The startup also works differently than other larger storage companies by working exclusively on month-to-month contracts so customers can cancel at any time. Neighbor also offers a free $25,000 renter item protection policy to ensure a higher level of safety for belongings being stored.

This business model has worked incredibly for the company as well, with revenue five times larger compared to the same time last year. Much of this growth from the startup can also be attributed to the shifting patterns of people moving out of major metropolitan areas during the pandemic, causing a major boost in overall demand.

Neighbor’s Funding Round and Future Plans

In Neighbor’s Series B funding round, the company raised $53 million. The funding round was led by Fifth Wall with participation from several individual investors, including major names like DoorDash CEO Tony Xu and Uber CEO Ryan Graves, among others. The company plans to expand its business operations to an even larger network of hosts as well as generate buzz for themselves through marketing. Now that Neighbor has locations nationwide, its long-term plan has become to reach global markets.

While the company is seeing strong success and funding through its ongoing business model, Neighbor is a part of a growing self-storage startup boom happening right now. Earlier this year, self-storage company Stuf also saw strong support during their seed funding round. The self-storage market looks to continue to grow throughout 2021 as demand remains high even as the pandemic wanes.

When commenting on the success and future prospects of the company, Neighbor CEO and co-founder Joseph Woodbury said, “We have tens of millions of square feet of self storage on the platform. The beauty of that square footage is that it’s in every single state. But we want to continue to expand nationally and as we grow and mature, we’ll turn our eyes globally as well.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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