BoxBox: the Estonian startup turning spare space rental into a profitable digital business

Remember when startups used to tell us they were the Airbnb of X? Well, at Slush last month, I met BoxBox, the Estonian Airbnb of self-storage. It's turning an old analog business — spare space rental — into a profitable digital business. 

It was the brainchild of two co-founders in their early twenties, CEO Markus Evardson and COO Kevin Kaldalu.

Evardson came upon the notion of cheap warehouse self-storage abroad a few years back and thought he could create the idea in Estonia. Besides, he needed somewhere to store his winter tyres. I spoke to Kevin Kaldalu to find out more. 

He recalled that he hired a big warehouse and put up shade walls and wooden partitions:

"I took out the good old Yellow Pages ( a telephone directory book that lists businesses and organisations) and just started going line by line, and page by page, calling people asking if they have too much stuff." 

Kaldalu admitted modestly, "It worked super well","and customers soon rented about the entire building. 

A competitor acquired the company a few years later, but the idea of self-storage remained. 

What if instead of storage at a far-flung warehouse, items could be stored at a place locally to you, like across the street at a neighbour's place? 

BoxBox emerged, and a move into a Tallinn office unearthed a large, empty office building nearby. Its owner revealed it was vacant in anticipation of Rail Baltic construction a few years later. 

BoxBox took the building under its belt and, taking another entrepreneurial approach, door-knocked the neighbourhood, finding people with too much stuff or space. Within two weeks, it had customers.

Peer-to-peer storage is nothing new but it's curious that it's taken startups to disrupt self-storage.  In the US, there's an abundance of offerings including NXTSTOR, PeerStorage, and stache. Neighbor, which facilitates self-storage and the renting out of residential parking, has raised $65.7 million. In Sweden, youstock has raised $9.7 million, and vinden over $2.6 million. 

Despite its infancy, BoxBox has made money from the get-go with a current "42 per cent gross margin."

For BoxBox, the value of peer-to-peer storage expanded when it learnt that 40 per cent of European commercial spaces were sitting empty. Many cities lack inner-urban warehouses, but an abundance of underutilised offices offers a valuable alternative, thanks to the post-COVID work-from-home trend. Kaldalu enthused:

"There is so much dead space inside cities that could be allocated. And that's what we've been doing ever since.

We are solving a problem for companies, reducing the need to transport goods long distances by helping companies store goods more cheaply and closer."

In addition to facilitating sharing via its platform, BoxBox also handles insurance and the pickup and delivery of goods through third parties. 

Goods stored vary from luggage storage near the Tallinn airport to a company storing aeroplane engines. The service is also popular with early-stage retail companies. 

The company currently operates in Finland and plans to expand to Sweden, Latvia, and Spain. For example, it works with accommodation chain Forenom in Northern Europe, filling basements, empty rooms and warehouse space, and is set to add Necesito un Trastero, one of the largest warehouse companies in Spain, to the BoxBox platform.

But it hasn't all been smooth sailing. Kaldalu revealed that the biggest challenges have been navigating cross-border jurisdictions, admitting:

"I never really thought so much about European company structures and how different countries operate with their tax system." 

Unsurprisingly, he fully supports the creation of an 'EU Inc' entity under the 28th regime. 

Kaldalu asserts that BoxBox's success is solving a customer pain point. While the company has digitised peer-to-peer storage, he stresses the importance of interpersonal marketing efforts like cold calling and visiting companies in person. He sees an emotional aspect to the company's work, especially when dealing with scenarios when families have to store relatives' goods:

"There's an emotional side to really understanding the problem and how much it lifts a person to have more space in their house finally.  We're trading people's physical goods in physical spaces." 

And, while, there might be a temptation elsewhere to entirely digitise the process with customer service AI and the like, efforts to introduce Estonian into LLMs are still in their earliest stages. So until then, BoxBox, with a small team — most of which are 20 or more years younger than more people in real estate — will continue with its old school methods like picking up the phone and door knocking, and in turn, solving the problem of self-storage. 

Lead image: Boxbox. Photo: uncredited.