Wild things happen in the self-storage business.<\/p>\n
In 2023, Matt Engfer was at back-to-back lien auctions in Texas. At auctions like this, bidders buy abandoned units with no idea what\u2019s inside, gambling on mysteries.\u00a0<\/p>\n
So the opening of a unit can get dramatic. The lock comes off, the door curls up, and everyone inhales. And on this particular Texas day, that first unit was an out-of-left-field treasure trove, filled with artwork worth tens of thousands of dollars. The second unit was even more memorable.\u00a0<\/p>\n
\u201cThey opened it up,\u201d Engfer says, laughing. \u201cAnd what did they find there? A mouse-breeding apparatus to feed snakes with. You\u2019re definitely not supposed to keep live animals in a storage unit. But this thing was filled with mice that were being sold to snake owners.\u201d<\/p>\n
Is this the best story I\u2019m going to hear this week? Most definitely. But it\u2019s also a view into how surprising the self-storage business can really get. Self-storage is one of those classic invisible but ubiquitous industries\u2014the overflow of life needs to go somewhere, and there are a lot of people in the world. And because this is 2026, it tracks that it would have its own legacy software, which Engfer believes can be improved upon.\u00a0<\/p>\n
That\u2019s why Engfer and Adam Fleming in 2022 founded self-storage software company Cubby. The company now counts more than 400 operators with north of 2,000 facilities among its customers, a group that includes Atomic Storage Group and American Self-Storage. It\u2019s also reached a key financial milestone: Cubby just raised a $63 million Series A, led by Growth Equity at Goldman Sachs Alternatives, Fortune has exclusively learned. The company\u2019s existing investors include Third Prime and Bienville.<\/p>\n
Cubby, in some sense, is looking to solve the classic enterprise software problem: that existing legacy software is considered by many to be outdated. Even before starting Cubby, Engfer was met with skepticism.\u00a0<\/p>\n
\u201cIn 2018, even renting a unit online was barely a thing,\u201d he said. \u201cMeanwhile, you could rent any hotel room in the world online. So, from a customer perspective, clearly the tech wasn\u2019t good enough. But industry folks were sober-minded, and not overly enthusiastic. It was clear it would be hard, but there was a lot of opportunity.\u201d<\/p>\n
That\u2019s because self-storage is pretty darn huge. The industry is worth about $50 billion, and there are currently more than 52,000 self-storage locations across the U.S.\u2014more than the combined U.S. locations of Burger King, Chick-fil-A<\/a>, Starbucks<\/a>, and McDonald\u2019s, Engfer tells me. It\u2019s a business that tends to have 30% to 40% profit margins, with solid to great demand consistently.\u00a0<\/p>\n \u201cDepending on the research you look at, between 15% and 25% of the population is a storage renter of some sort,\u201d he said. \u201cAnd that\u2019s growing by generation. Gen Z rents more than millennials; millennials rent more than Gen Xers; and Gen Xers rent more than boomers. Then you have boomers aging out of their homes. So, there\u2019s a lot of demand for storage.\u201d<\/p>\n Those varied forms of demand also make self-storage somewhat \u201crecession-resistant,\u201d he added. It accordingly follows that Cubby wouldn\u2019t be the only player looking to run software through this vast space. Cubby\u2019s top competitor is SiteLink, the dominant self-storage software provider in the country, whose backers include private equity firms EQT<\/a> and Cove Hill Partners. Engfer wants to be clear: Goldman\u2019s investment isn\u2019t a PE deal. Once inbound interest surged, he said, Engfer was looking for a growth equity partner who wouldn\u2019t grab \u201ctwo hands on the steering wheel.\u201d<\/p>\n \u201cWe want the healthy pressure of an investor who thinks big,\u201d he said. \u201cThat\u2019s good for our company \u2026 At this point, we wanted a helpful minority investment partner with an understanding of commercial real estate and who\u2019s going to work hard for us\u2014but we want to run the company because we know how to do it.\u201d<\/p>\n I asked Engfer why a business like self-storage ultimately matters. And as much as anything else, his answer is about the socioeconomic state of the country. Self-storage has upward mobility that you only see rarely these days, he said.<\/p>\n \u201cAs far as I can see, [self-storage is] the last place where you can get a job working for $18 an hour as a site manager without graduating from college,\u201d he said. \u201cYou can get promoted a couple times, become a district manager, raise a fund, buy or build a facility, then build a very valuable real estate portfolio. And I know this is true, because half our customers are those people.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Wild things happen in the self-storage business. In 2023, Matt Engfer was at back-to-back lien auctions in Texas.…\n","protected":false},"author":2,"featured_media":299605,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[178],"tags":[79,18,236,19,17,4670,256],"class_list":{"0":"post-299604","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-business","9":"tag-eire","10":"tag-entrepreneurship","11":"tag-ie","12":"tag-ireland","13":"tag-silicon-valley","14":"tag-venture-capital"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115944959794506135","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/299604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=299604"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/299604\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/299605"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=299604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=299604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=299604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}