Storefront, a startup that launched this past fall out of San Francisco startup accelerator AngelPad focusing on helping businesses find short-term real estate rentals for “pop-up shops” and other temporary stores, is set to announce today that it’s taken on $1.6 million in seed funding.
The investors in the seed round include Mohr Davidow Ventures, Great Oaks Venture Capital, 500 Startups, David Tisch’s BoxGroup and Sand Hill Angels, among other angel investors.
Storefront’s co-founder and CEO Erik Eliason said in an interview that the new funding will be put toward helping the service expand beyond its native San Francisco, where over the past six months the company has helped over 100 large and local brands open pop-up shops (including the Storenvy space which we recently profiled for TechCrunch TV) and listed over 3 million square feet of retail space. That geographical expansion is already underway, with the recent launch of Storefront listings in New York City.
The funding will also be used to add more hires to Storefront’s team, which currently has six full-time staff.
The idea behind Storefront is to help make it just as easy to open a brick-and-mortar shop as it now is to sell stuff online, matching up sellers looking for retail space with existing real estate owners who are currently facing 10 percent vacancy rates.
Eliason put it this way:
“Our bigger vision is that it’s really easy to open a store online with Etsy or Storenvy. But offline there are still so many friction points with setting up a store. Things like Square make things like payments easier, but finding the space, securing the space, furnishing the space — it’s not an easy process.”
As for the competition? Traditional commercial real estate brokers are not focused on the short-term rental space for the increasingly popular “pop-up” market, because it’s not as lucrative for commissions, Eliason says. Craigslist has short-term real estate listings, but those come with all the hassles that exist for, well, everything on Craigslist.
In terms of revenue, Storefront does not charge any commission on the rental of a space itself. The startup makes money by taking a referral fee for any purchases that it helps facilitate after the space has been leased, such as sales of furniture, fixtures, temporary staff, signage and insurance.
Overall, it’s a smart idea at a very smart time (with a catchy name to boot), so it’s no wonder that it’s gotten the attention of investors. If Storefront can execute its vision throughout the U.S., it could turn into something big.