LuggageHero

Idea

Introduction

LuggageHero is a proven luggage storage service that operates as a sharing economy concept. Our extensive network of storage sites are located inside local retail shops, cafés and hotels that have extra space available. We call them “luggage heroes.”

By partnering with local businesses, we are able to offer luggage storage options all over the cities we operate in. Currently, there are more than 1,000 luggage heroes available in 40 major cities in Europe and North America. Collectively they have provided more than 2 million hours of bag storage.

To use the service, customers book the nearest storage location through our mobile-friendly website or native app and instantly receive directions to the location on their smartphone. The drop-off and pick-up processes are quick and easy, and payments are handled securely online. There is no cancelation fee. Luggage is secured with a tamper-proof seal and is insured against damage or loss while in storage for up to €2,500 per bag.

Intended impact

It's a familiar predicament: you have a few hours before you can check in to your vacation rental, and you want to start doing some sightseeing. Or you have to check out by noon but your flight doesn’t leave until the evening. So you’re left exploring a city dragging your luggage behind you. Our mission is to solve that problem.

By utilizing existing space and resources of local businesses, LuggageHero is able to ensure that there is always a storage option close to where users need it. Our cost-effective solution, hourly pricing model and risk-free booking policy provides exactly the kind of flexibility and convenience that modern travelers have come to expect.

Even better, this concept doesn't only benefit travelers. It also gives local business owners an additional way of attracting a strong consumer group to their establishments as well as bringing in extra revenue.

Substantial accomplishments to date

- Luggage stored for more than 2 million hours since launch, growing 186% YOY (Monthly bag storage hours, Dec 2018 to Dec 2019).

- Total GMV (gross merchandise volume) of EUR 1.5M and total net revenue of EUR 0.9M growing 130% YOY (year-over-year) (Both as of Feb 2020 and based on unaudited management accounts).

- Operating in over 40 cities across North America and Europe with more than 1,000 locations, with most of the growth occurring in 2019.

- Acquired US competitor Knock Knock City in August 2019, strengthening ties to North American marketplace.

- More than 250,000 users on the platform, growing 169% YOY (Jan 2019 - Jan 2020).

- Currently #1 luggage storage platform in the world in regards to largest number of reviews ★★★★★ from travelers (+50,000 unique reviews).

- Received substantial international press coverage in several languages, including from: The New York Times, Forbes, Lonely Planet, The Washington Post, Smarter Travel, MSN.com, Oprah.com, The Economist, and more.

Timeline:
Prove = 2016 - 2018:
- Proof of concept in Copenhagen with MVP (minimum viable product).
- Product market fit with launch in London and New York City.
- Luggage stored for +650,000 hours since launch.

Grow = 2019:
- Acquired US competitor Knock Knock City in August 2019.
- Execution on Project36 scaling to 40 cities across more than 1,000 locations in Europe and North America.
- Luggage stored for 1M hours since launch reached in June 2019, then to 2M in January 2020.
- Became a preferred vendor for Booking.com and integrated with major Property Management Systems (PMS), with a total reach to more than 100,000 properties.

Monetisation strategy

The LuggageHero business model is simple: users are charged by the hour (from $1/£1/€1) with a reasonable daily maximum + a handling fee (from $2/£2/€2) per bag. All prices are per bag stored. The revenue generated is subject to a 50-65% commission charged by LuggageHero.

It's free of charge for businesses to join as storage partners.

Future opportunity: Extending our offerings beyond luggage storage.
We are the only storage provider to provide real-time on-demand luggage storage, as far as we are aware, enabling unique data-points of traveler behavior in the cities. Our ambition is to create an additional revenue stream based on the city and traveler behavior data that our algorithm is collecting and analyzing and to package that as a subscription service. We can see this has a great value proposition in terms of future urban planning and also in selecting the most popular places for retail chains, restaurant chains, hotels, apartments/rental and real estate investment purposes.

Use of proceeds

Breakdown of how the funds are planned to be spent:

• Sales and marketing (new markets) — 76%.

• Product development — 14%.

• Management and admin — 8%.

•Financing Costs - 1%.

The business is running with positive contribution margins in 17 out of 40 cities*. It takes on average 3-4 months post-launch to reach the 1st month of a positive contribution margin*. The most profitable cities are Copenhagen, London and New York City, which were launched in 2016-2018*.

* Figures based on unaudited management accounts.