One of the many upcoming global trends of this turbulent year is urban self-storage and decentralized ‘micro-logistics’ hubs, such as parcel collection lockers. As the Coronavirus pandemic drove a “work from home” boom, millions of people looked to storage solutions to increase space in their living, and e-commerce, delivery and logistics companies looked for ways to deliver and store products more efficiently. By the end of 2020, the global market was valued at around €40 billion, expected to reach a value of around €54.8 billion by 2026.
It didn’t all begin with the pandemic, though. During the past few years, increasing house prices in urban areas across Europe have lead to downsizing and the growing need for storage. Meanwhile, as online trade continues to boom, urban storage solutions have begun to play a key role in the home delivery sector which requires new and innovative structure to meet the growing market trends.
With Europe lagging behind the US in this area, Vienna-based logistics and warehousing startup, Storebox, has just raised €52 million in their series B investment round, to lead transformation of the self-storage industry in the European market. We interviewed Storebox’s CCO, Ferdinand Dietrich, to find out what plans the company has in store.
Storebox has a big role to play in the rapidly growing delivery industry. Could you tell us more about how the storage industry is enabling the transformation of delivery services in Europe?
Storebox is actively looking to leverage its storage spaces to create a multifunctional offer to both private and business customers. We have been able to spot trends such as ‘Click & Collect’ and ‘Quick Commerce’ early on, whereby Storebox infrastructure enables a fast and efficient last mile delivery for a number of industries.
Driven by the COVID-19 pandemic, these trends have seen an exponential growth in North America and we are convinced that European markets will follow suit. However, the need for a large network and infrastructure to breed these opportunities is where Storebox is at the cross road of it all.
The development of urban self-storage, and inner-city and micro-logistics hubs is a fast-growing global market trend. How did the Coronavirus pandemic boost this trend?
2020 saw a peak in online shopping activity where parcel volumes rose to over 90% YoY. It goes without saying that customers did not feel comfortable being among large crowds, and as this trend continues throughout the years to come we aim to create value for markets dealing with logistics.
The logistics sector has been in sync with the end consumer’s needs and wants. Here is where BOPIS (Buy Online, Pick-up In Store) experienced a growth catalyzation, and we believe that the “Store” concept will be complemented by other micro-logistics hubs, such as storage spaces and parcel lockers.
Why is there such a big growth potential for the storage industry in the European market in particular?
Europe has more green cities than any other continent, as well as a growing number of smart cities. Therefore, there is a need for having inner-city spaces where businesses and customers can interact with each other increases.
The impact of smart and green residential areas in several industries will evolve around sustainability and environmental efforts. For example, the cities of Amsterdam and Vienna are increasingly transforming their streets to reduce the use of motorized and large vehicles, becoming more environmentally and pedestrian friendly.
These legislative changes create a market for micro logistics, where smaller and more compact vehicles will have to access smaller storage units and warehousing hubs within shorter distances.
Moreover, due to the rise in real estate prices in several European major cities we can service the private sector by offering our self-storage product as an extension of their own living quarters, thus reducing the need for larger housing units. This we can only achieve through density of locations, which is a major strategic priority of Storebox.
Storebox has kept it’s eye on innovation during times of uncertainty. What’s your advice for other founders looking to prioritize innovation in times of constant change?
Flexibility and adaptability. As founders, we could be tempted to conform with the status quo. There are times when a company vision can be redefined in new and innovative ways.
Add value to ecosystems and societies. Finding a gap during uncertain times requires a deep understanding of where our team and operations can create added value. Being able to keep a pragmatic approach to this gap and validate your hypotheses swiftly to fill it in is key to increasing innovation.
Managing a startup during periods of high growth can be extremely exciting but also comes with a few challenges. What key lessons did you learn during this period?
Apart from flexibility and adaptability, the team plays a major role when going through challenging times.
The number one lesson is to know what type of company you are. We have identified ours as one where resilience and the coordination of its parts are in sync. And the team breathes that. Resilience seems to have become a word we hear and read about on a frequent basis since 2020, and we believe everyone out there strives to incorporate that into our collective culture.
We have aligned with everyone at Storebox to live through mutability and resist the hardships of risk factors such as a pandemic. Empowering a team will empower companies back to innovation to create new economic channels when in times of need.
Storebox has just raised €52 million in their series B investment round. How are you planning to use the funding? We hear international expansion is on the cards?
There are two types of markets we will be focusing on. The first type is geographic, which drives our efforts to the full consolidation and market leadership of the German speaking area, as well as the expansion to new countries with similar characteristics.
The second type is where we can capitalize on adding value to the entire logistics ecosystem. Vertical and horizontal expansions are key to utilize our storage spaces in multiple ways. We are looking forward to working with several industries to transform our locations into a wide range of services and products from parcel click and collect units, to temporary or permanent storage spaces for companies, to neighborhood-convenient self storage facilities for private customers.
Organizations are the enablers of an expansion, so we will naturally pay strong attention to growing our team as well.
How did Storebox prepare for the investment round? What advice can you give to other founders looking to get funding?
Know your market, know your key growth indicators and always maintain a close communication with your potential investors. If you have a good grasp of where they are looking to invest, as indicated by their past investments, then the mutual understanding will grow, and you will be able to speak their language.