Spacer is vying to become the dominant marketplace for storage, parking and warehouse space in Australia, today announcing that it has acquired Melbourne-based startup Parkhound and completed a $2.7m in Series A funding round.
Founded by former private equity professional Roland Tam and ex-Deals Direct CEO Michael Rosenbaum, Spacer has raised $5 million in funding from angel and private investors since launching two years ago.
The acquisition of Parkhound, which has been dubbed an ‘Airbnb for parking’, sees Spacer take control of the startup’s intellectual property including database, tech platform and customers. In addition, it means Spacer will have more than 20,000 suppliers across the storage, parking and warehouse verticals, and maintain a number of business partnerships Parkhound had with CBD parking operators.
Tam spoke to Dynamic Business about Spacer’s latest capital raise and Parkhound, which is the company’s second acquisition this year, following on from US-based startup Roost – like Spacer, a peer-to-peer marketplace for storage and parking space.
DB: How will Spacer invest the Series A funds?
Tam: The capital will be used to support the Parkhound acquisition and additional investment in people and marketing. Our platform and brand are gaining strong traction, and we want to extend our footprint from being Sydney and Melbourne centric, to nationwide. Our operating model is translating well in our US markets (San Francisco, Boston and New York) and the funding will provide a runway to becoming earnings and cash flow positive in the next 12 months.
DB: How did the acquisition deal come about?
Tam: Due to our vision to be the #1 marketplace across the storage, parking and warehousing verticals, we stay close to who is operating in the same space. Parkhound founders Rob (Crocitti) and Mike (Nuciforo) have built a great business based on word of mouth, organic search and serving a community need, which is why we reached out to them a couple of years ago. Since then we’ve stayed close, sharing learnings and tactics. When the opportunity arose to buy Parkhound, we were the natural acquirer, we felt, owing to our long-term ambitions and the fact that we have the operational expertise to take the business to the next level. Rob and Mike have both been fantastic in ensuring a smooth transition to Spacer, and we are hopeful they will continue to provide expertise and product knowledge on a consulting basis in the future.
DB: What value will Parkhound generate for Spacer?
Tam: There are significant synergies between the businesses, which we can begin to take advantage of immediately. ParkHound has a neat tech platform, UI/UX and on-boarding process, while Spacer’s strength in operations, marketing and partnerships brings gravitas to the broader offer. As a combined entity, we will have 100,000 users across the platforms, growing at 20% MoM. This will consolidate Spacer as the clear #1 marketplace for storage and parking space in Australia.
DB: Will the acquisition address customer pain point?
Tam: At present, our demand for parking outstrips supply by three to one and we cannot meet all the needs of our customers. Combining Parkhound with Spacer will generate 15,000 listings, which will create significantly more options and liquidity in our marketplace.
DB: Will Parkhound’s model influencer your US operations?
Tam: We are currently looking at platform migration and applying some of the growth tactics used across both businesses, which is keeping us very busy!
DB: Are there plans to acquire further marketplaces?
Tam: Marketplaces are a winner-takes-all proposition and scale is critical. We want to grow both organically and by acquisition; we are fortunate to have strong in-house M&A capability to mop up other businesses who don’t have the traction or funding to take it to the next level.
See also: Spacer takes on world’s largest self-storage market with buy-out of US equivalent, Roost and New ways for Aussie start-ups to thrive in the shareconomy: Ex DealsDirect CEO talks Spacer.