The Silicon Valley full-service used furniture marketplace called Move Loot has gotten plenty of validation in its first year of life.
The co-founders, two of whom graduated from UNC Chapel Hill, were accepted into the prestigious Y Combinator
accelerator last winter. They raised $2.8 million in funding from Google Ventures, First Round Capital and Index Ventures upon a June 2014 Demo Day. And they quickly became an option of choice for people moving out of San Francisco to get rid of their old stuff. And for people moving into the city to quickly acquire new stuff. Sales are growing 40 percent month-over-month since an October 2013 launch.
But startups are constantly in validation mode in their early days. So the team has already begun its next big test this fall, opening its second Move Loot operation in the Research Triangle. It launched a region-wide advertising campaign last week.
Why here? Because if it can work in Raleigh-Durham, then it can work in any other secondary market around the nation, says local GM Mike Althoff. The Triangle also is the fastest growing of those with more than a million residents, and the founders have roots here.
So far, $40,000 in furniture has been collected—about 600 items. Check out the website, and you can browse an interesting collection of desks, nightstands, dressers, artwork, chairs, bookshelves, beds and tables including my personal favorite, the Steel Sawhorse Table.
More than a dozen workers manage the local operation including two drivers who pick up and deliver the goods; stagers who clean and photograph items; and others who upload images and write compelling product descriptions, handle customer service and local marketing efforts. All of that is free to the seller (and buyer, for delivery). Move Loot earns a 50 percent consignment fee when the item is sold. Items that aren't sold can be donated to a local charity in return for a write-off for the seller, or, the seller can come retrieve them from the warehouse.
Move Loot has a broader mission to keep used home goods out of landfills, Althoff says. "Being a sustainability enabler is something that really matters to us."
Althoff, a Virginia native, UNC and Fuqua grad, leads the local operation. He's a college friend of the UNC founders, who moved back to the Triangle from San Francisco 18 months ago after working for energy efficiency startup Stem.com
. He recently left a job directing the college marketing platform for the Chapel Hill agency The AroundCampus Group
Having made several cross-country moves himself—including a six-month period of traveling the world with his wife with no furniture—he felt the pain of moving, selling and acquiring new items. Like the founders, he found Craigslist time-consuming and not always trustworthy, and moving companies expensive.
"It was a no-brainer for me—the business model is exciting. And I think we're meeting a need in Raleigh-Durham," he says.
Craigslist pioneered that model by providing an open marketplace for people to buy and sell items outside of traditional retail or consignment. What MoveLoot offers—and what attracted $750K from Silicon Valley's Index Ventures
—is the service on top of the software platform.
"Marketplaces are a business model we absolutely love," says Terrence Rohan
, who leads Index's seed fund. Index has invested in more than 30 of them, including Etsy
, farm fresh produce delivery service Good Eggs
and the marketplace for 3D-printed goods Shapeways
. But the latest trend is what he calls "full stack marketplaces," those taking on the logistical challenges of supply and demand and moving goods around.
"When you get over the fear of warehouses and hub-and-spoke delivery models, you can open up new value propositions that weren't done before," he says. The better a company gets at managing those logistical challenges, the better the margins.
There are definitely some idiosyncrasies in this region, Althoff says. There are many more large housing developments than in San Francisco, offering a unique opportunity for partnership and density. And many more submissions are coming from the downsizing community, versus young professionals. A key challenge here is getting people comfortable with making furniture purchases on the Internet—the biggest competition comes from large discount chains like Target or Ikea, which offer trendy items at very cheap prices.
His team is still determining how to best take advantage of the early trends. But one lesson he's implementing weekly at Move Loot comes from the founders' Y Combinator experience—to set and hit bigger goals every week while still maintaining the same quality of service. Althoff doesn't expect that to be too hard in coming weeks and months.
"I haven't met someone yet who hasn't had furniture to get rid of or is in the market for furniture," he says. "Our hope is that we're meeting a real need in the area, and growth will come from that organically."