With a message of “Rent More. Own Less,” Richmond startup The Shed has attracted funding from two Virginia angel investor networks.
Hampton Roads network 757 Angels and Charlottesville Angel Network (CAN) have committed funding to the product rental company, it announced in January.
“To be able to reach even a greater network of investors from Virginia, it was a great tribute to the whole region and how much they believe in helping startups do well in the region,” said Karen Rodgers O’Neil, The Shed co-founder and chief marketing officer. “We were extremely appreciative, and it’s allowing us to continue to power forward and continue on our path.”
Founded by O’Neil and CEO Daniel Perrone, The Shed has locations in Richmond and Denver, where they rent thousands of brand name items, ranging from picnic tables to kayaks to carpet cleaners to stump grinders.
Similar to how a person might reserve a room on Airbnb, renters can reserve an item for a certain amount of time, then choose to either pick it up or have it delivered.
“The reason we’re able to do what we’re doing, which is so disruptive to the industry, is because we’re not buying any of our equipment,” O’Neil said.
Manufacturers provide the product, then The Shed team manages logistics, cleaning and marketing and other details. At the end, both The Shed and the manufacturers get a share of the rental revenue.
“That’s actually the real transformative part of our business,” O’Neil said.
A 2020 Richmond Inno on Fire winner, The Shed raised an initial fundraising round of $1.25 million. The team declined to share the most recent funding amounts, but they did detail how funding from 757 Angels and CAN would support their growth.
The startup will soon launch a new, mobile-first version of its platform. An improved interface will make it easier for people to buy consumables like carpet cleaning fluid to go with their carpet cleaner rental, for example, and to buy a product if they use it and like it.
“Overall, our goal is just to really make rental experiences much better than they are,” O’Neil said.
The company also plans to broaden its management team and expand operations. It will soon open a second Richmond warehouse, in Chesterfield, as well as additional locations in Portland, Oregon, and Austin, Texas.
The pandemic has only increased demand for The Shed’s products, it founders said, especially outdoor equipment. Perrone, during an interview last week, was in California supporting national restaurant chain P.F. Chang’s, which is using The Shed’s “restaurant in a box” package to stand up outdoor dining.
With millennials more interested in experiences than ownership, and boomers downsizing, it’s an ideal time to be disrupting the $200 billion rental business, Perrone and O’Neil said.
“The bar is very low, so the experiences are not that great, and so it just seems like it’s time,” O’Neil said. “It’s the right idea for the right time.”