With less people travelling nowadays, you’d think that traveltech startups are having a hard time. LuggageHero, a global luggage storage startup, has experienced a standstill in customer activity, but has been busy working behind the scenes to get ready for when the lockdown is lifted.
From creating survey-based reports on the travel industry post-COVID, to sealing new partnerships, to just closing their seed funding round, they are poised to stay on track. We caught up with CEO and founder Jannik Lawaetz to talk survival tactics, closing funding during coronavirus, and scaling from operating in 3 cities to 40 cities in 12 months.
Hello Jannik, thanks for joining us! To start off, where did you get the idea for a luggage storage startup, and what made you go for it?
Like so many ideas, mine came from a problem I had personally faced – a need for short-term luggage storage. I saw this on both ends. When I was an Airbnb host in Copenhagen, travellers were always asking about bringing their luggage before check-in or leaving it after checkout. Unfortunately, I often couldn’t accommodate them because of my schedule. Then, as a traveler, I faced a similar problem in Barcelona. Checkout was in the morning and my plane was in the afternoon and I didn’t want to be weighed down with my bag. My host suggested asking a nearby shop keeper if he’d hold on to my belongings for a few hours. Using hand gestures, the store owner said yes. The transaction felt a little risky, but my bag was there and intact when I returned to pick it up. From there, an idea was born! Or you could call it an obsession, because from then on I got to work on the LuggageHero concept, first in my hometown of Copenhagen, then in London and New York City. Last year, we rapidly expanded to 40 cities in Europe and North America.
With less people travelling nowadays, how have you been affected, and how have you pivoted?
Of course our business of storing luggage has been greatly affected, with travel nearly at a standstill. But we’ve worked hard these past two months in order to be poised for what we are sure will be travellers’ pent-up demand.
We’ve been lucky in a couple ways. First, we’re based in Denmark, which has really taken care of its workers through paid furloughs and other measures. Also, we had already been working on a project that will give us an additional revenue stream, one that will be extremely useful when travel returns. Related to that, we’ve also reallocated resources from the expansion team into developing a new data structure to use when expanding.
Other opportunities we’ve identified include an uptick in partnerships with businesses seeking additional revenue streams. That includes property management companies to connect with and hotels and shops that would become storage partners.
Another significant step forward was that we’ve conducted and published two customer surveys about travel after COVID-19 restrictions are lifted and are currently working on our third. Not only have these travel sentiment monitors given us valuable insight into how customers are feeling (cautious, but also very optimistic!), we’ve gained valuable PR exposure through publishing and promoting them. They’ve been mentioned in more than 200 news media globally, including more than 50 top tier media, such as Forbes, Business Insider, MSN and Travel Pulse.
Smart luggage storage is becoming more popular and there are a few competitors out there. What makes you different?
We’re the only player in the market to offer a fully flexible 100% self-service and on-demand solution, where travellers pay only for the hours spent. We’ve found that customers really appreciate that.
You recently closed your crowdfunding, congrats! What is your funding strategy, and why did you choose equity crowdfunding instead of VC funding?
Thanks! We’ve actually added crowdfunding on top of VC funding, twice now. The first time was early 2019 and now again this year, both times on the Seedrs platform. Other than the obvious benefit of raising capital, crowdfunding gives us an opportunity to engage with our customers, luggage-storage partners and overall network in a unique manner – by offering them the opportunity to own a stake in LuggageHero’s success. It’s really an extraordinary way to bring people off the sidelines and onto the playing field. In that manner, we have many people with a vested interest in our success: customers who use our luggage-storage service, business owners who store their luggage, and other players in the travel industry. This gives us a huge boost, both financially and emotionally. And the fact that we did this during the COVID-19 pandemic proves that people feel positive about a return to travel. That gives us quite a big feeling of affirmation and anticipation!
What do you plan to use the funding for?
The funds will be used to expand into more cities and also refine the data-driven offerings currently in development.
To create your network of luggage storage spots you must have had to create many local partnerships in different countries. Do you have any advice for founders looking to expand abroad in this way?
It’s definitely challenging to work with different cultures, customs and rules. That’s why our model includes asking our community of travellers for contacts in the countries we’re looking to open in and working with as many local stakeholders as possible. They’re the ones who intimately know a place and its people.
What has been your biggest challenge, and what did you learn from it?
Going from managing 3 cities to 40 cities in less than 12 months and making sure that we grow the team with the right skill sets. And on a personal note, doing so while having a partner and two children at home! Above and beyond, I learned that it can be done by assembling a fantastic team and by staying optimistic, realistic, respectful and passionate. We are all of those things and they have kept us going through a remarkable growth phase and now a pandemic. This gives me faith in our future.