It's been a challenging year for the sharing economy. There was a highly publicized implosion of $10 billion-backed office space startup WeWork. Then the $360 million-funded dog-walking startup Wag laid off a large part of its workforce and came under new management. Finally, the $403 million in VC funding wasn't enough to save peer-to-peer car loan company GetAround struggled after getting owners’ autos stolen – remarkably. Surprisingly, there are members of the VC community that are still willing to bet big money on the sharing economy.
But there is no great reward without great risk. Nobody knows this better than Silicon Valley venture capitalists who always have their view fixed on the horizon - searching for the 'next big thing.' One such example is Structured Capital, an early-stage venture fund specializing in sharing economy companies. Initially founded in 2013 by Jillian Manus, Jacob Shea, and Mike Walsh, they primarily invest in companies that contribute to a "zero-waste economy." Whether its time, skills, possessions, or space – it's all about tapping into the untapped potential of people, places, and things. Structured Capital is not alone – others have taken notice of the trend.
The rise of cloud computing has revolutionized the way people do business, and the sharing economy has never been more profitable because of it. People no longer want to own things – they want to rent them. Rent the Runway was launched in 2009 and is based on a subscription-based service model. In exchange for regularly-paid fees, RTR provides designer fashion options to their customers that might otherwise be too expensive to buy. It was a roaring success, and similarly based ideas have sprung up all over the globe.
For example, the Santa Monica-based The Black Tux has raised $62.6 million in funding and offers formal wear rentals with a twist. They maintain showrooms located across the country and provide in-home fittings for those requiring a more personal touch. First Round Capital, who has invested in Square (NYSE: SQ), Uber (NYSE: UBER), and Looker, was one of the startup's first investors. VC giant Menlo Park also backed Black Tux, along with their contributions to Roku and wifi service eero.
Boatsetter is another peer-to-peer lending site that provides a platform for boat owners and renters to come together. The Florida-based tech business started in 2013 and has successfully raised $31 million to date. The platform provider nearly 20,000 boats listed and can be found at one of its 600 locations spanning the globe. Venture firms like Valor Equity Partners – who also invested in Bird, Chime, and SpaceX – has contributed capital to Boatsetter.
For those who need to stage a home, Feather is a B2C service that rents furniture to consumers through memberships ($19 per month) or on an on-demand basis. The service also provides delivery and assembly of borrowed pieces. Users must pay a monthly fee for furniture while in use, and there are options for members to buy furniture at a discount. The tech firm was founded in 2017 and has raised $12 million from firms like Bain Capital Ventures – that contributed capital to Lime – and Kleiner Perkins – in addition to Instacart and Brex.
Austin-based Outdoorsy startup is all about giving people an alternative to owning a camp trailer of their own. Launched in 2015, the company has created a platform where RV owners can list their vehicles for consumers wanting to relive (or live) the nostalgia of the classic family vacation. It’s raised $75 million from investment firms like Tandem Capital and Autotech Ventures, who also raised money for Lyft and Bus.com.
Cover Photo by Bobby Burch on Unsplash
Sources:
https://www.forbes.com/sites/bizcarson/2018/08/21/getaround-car-rental-softbank-series-d-funding/#44477a0641bd
https://www.cnn.com/2019/12/09/tech/wag-softbank/index.html
https://www.businessinsider.com/how-structure-capital-came-to-disrupt-the-sharing-economy-2018-5
https://www.washingtonpost.com/local/trafficandcommuting/thieves-are-using-peer-to-peer-car-rental-apps-to-find-their-next-ride/2020/02/13/b84d8e16-49c0-11ea-9164-d3154ad8a5cd_story.html
https://www.crunchbase.com/organization/rent-the-runway#section-overview
https://structure.vc/#our-entrepreneurs
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
