It’s vacation protocol: you finally get to your destination after a long journey but you can’t check into your hotel until later in the day, so you’re stuck killing time with your luggage in tow. Or you have a long layover but you don’t get to leave the airport and explore because you don’t want to deal with lugging your suitcases around. The experience of dragging your suitcase around town removes the glamor and excitement associated with travel. Thankfully Vertoe changes that. It’s a simple on-demand short term storage marketplace that connects people who need to store their bags and personal items with nearby local shops that have unused space and are hoping to earn a little extra revenue. Travelers can store their items for a few hours or even a couple of days, and the service only costs $5.95/day per item.
AlleyWatch spoke with CEO Sid Khattri about the company’s inspiration, future plans, and recent round of funding.
Who were your investors and how much did you raise?
Seed round – $1.85M from Ingwe Capital, ff Venture Capital, Techstars, and several angel investors.
Tell us about the product or service that Vertoe offers.
Vertoe is an on-demand short term storage marketplace where we connect people who are looking to store their bags and personal items for a few hours or days to nearby local shops and small businesses that have unused space.
What inspired you to start Vertoe?
The company was launched in late 2016 as a weekend experiment after my cofounder, Neha and I went through the problem of short-term storage first hand. We were on a multi-city west coast trip with LA being our final stop and after checking out of our Airbnb, what was supposed to be this super exciting day where we were going to explore Los Angeles for the first time together turned into a complete nightmare when we got stuck lugging 3 suitcases for 6 hours and time ran out. As a former Google employee, I knew that there had to be a better way.
How is Vertoe different?
Vertoe is a very unique and novel concept. Instead of creating new storage facilities, it uses unused space in local shops and small businesses to help people who have short-term storage needs like – luggage storage before check-in or check-out or when they are stuck outside their favorite sporting event or concert where backpacks are not allowed. These are problems that historically went unserved in society due to lack of affordable and convenient solutions. Much like Airbnb, Vertoe operates as a marketplace and the model can be scaled very quickly.
Vertoe is a very unique and novel concept. Instead of creating new storage facilities, it uses unused space in local shops and small businesses to help people who have short term storage needs like – luggage storage before check-in or check-out or when they are stuck outside their favorite sporting event or concert where backpacks are not allowed. These are problems that historically went unserved in society due to lack of affordable and convenient solutions. Much like Airbnb, Vertoe operates as a marketplace and the model can be scaled very quickly.
What are the typical concerns of potential location owners?
Safety and operational hassle tend to be the main concerns of location owners, but over time we have really refined both aspects.
Booking online is a necessary step, which allows us to verify customers identity. We also enforce a government-issued photo ID check that adds an extra layer of verification.
Other concerns arise from the operations side, but we offer lightweight training and simplified pricing to $5.95/day per item, irrespective of size and hours stored, etc. which has enabled us to streamline the drop-off and pick up process, which can be done in 2 minutes.
What market does Vertoe target and how big is it?
Our primary market is the travelers’ luggage storage problem. Our research shows that with over 2.1B annual trips in the US alone, hundreds of millions of people go through this problem each year.
We are also noticing an uptick in usage outside event venues where people keep getting stuck as large bags are not allowed inside.
What’s your business model?
We operate as a marketplace where we help connect people who are looking for short-term storage to nearby local shops that have unused space. We pay shopkeepers a portion of the revenue much like how other marketplaces like Airbnb and Uber operate.
What was the funding process like?
Fundraising is always a grueling process and it took us 3-4 months to get to our goal. Thanks to being part of Techstars, we got incredible support throughout this journey and a head start.
What are the biggest challenges that you faced while raising capital?
Our market has gotten very competitive in the past 1 year with a lot of new companies trying to attempt the same business model. This was always an investor concern although we always felt that this was further proof of customer validation and the fact that the market is big enough.
Our market has gotten very competitive in the past 1 year with a lot of new companies trying to attempt the same business model. This was always an investor concern although we always felt that this was further proof of customer validation and the fact that the market is big enough.
What factors about your business led your investors to write the check?
Strong traction and a great team.
Also, we deliberately stayed in NYC for a long time before expansion to avoid stretching ourselves thin across cities too early. This helped us really gain a solid understanding.
What are the milestones you plan to achieve in the next six months?
We hope to have a nationwide presence in top cities in the next 6 to 12 months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Capital is like oxygen for the startup. When you don’t have it, you should focus on really being bootstrapped and lean to prove out your business model and most of your early assumptions before you start fundraising in a big way. Creating a business from scratch is hard and there are lots of components that need to be tested and validated.
Where do you see the company going now over the near term?
Our main focus is expansion to become a nationwide player and invest in our product and tech to improve customer experience.
What’s your favorite restaurant in the city?
That’s a really tough question as NYC has so many great restaurants. Right now, I really like Roberta’s Pizza.
