How Bounce beat pandemic disruption and bagged a16z to lead its Series A

·9-min read

Bounce, a San Francisco-based startup that's spent over three years building up a business which layers a number of convenience-focused services, starting with luggage storage and package acceptance, atop a network of independent retailers and other businesses located in cities around the world, is looking to bounce back in a big way from the impact of the pandemic.

The 2020 global freeze on leisure travel put a temporary pause on demand for short term luggage storage. More people working from home because of COVID-19 likely also temporarily reduced demand for third party package acceptance services -- since more people were in to receive deliveries themselves.

Nonetheless, Bounce claims it was able to continue growing its business during the pandemic -- saying it paid out more than one million dollars to local businesses during the pandemic in spite of COVID-19's impact.

It's now anticipating a demand boom for its services as travellers jet off again and offices reopen to regular staff.

Currently, it's serving "tens of thousands" of customers per month -- with its largest markets being London, New York, and Paris -- but by late summer it expects to have grown monthly users to "hundreds of thousands".

That's quite the change from two years ago. Co-founder and CEO Cody Candee admits business "completely froze" for the first three months of the pandemic. But by summer 2020 there was a temporary unlocking as parts of Europe reopened to tourism -- so Bounce focused its efforts on markets like Croatia at that point.

He explains that it then kept retargeting different markets and regions as the impact of the virus fluctuated, seeking out pockets of opportunity as and where they appeared, such as switching focus from Europe to Australia in fall 2020 or targeting effort at non urban areas and domestic travel hotspots ("from Brighton to Myrtle Beach, to Hawaii", is his concise summary).

The upshot was Bounce was able to grow revenue 38x in 2021, per Candee -- reaching "millions" in revenue, and expanding its partner network to 40 countries. Now almost half (45%) of its revenue comes from outside the U.S., he adds.

"We basically just chased the opportunity wherever it was," he tells TechCrunch, summing up how Bounce tackled the last two years of pandemic disruption. "All the while, we kept shipping pieces of content to our website while expanding our store network knowing it may not have much effect now but once the pandemic subsided, far more customers would discover us and we’d have far more locations to serve these customers. It was a gamble and not easy but now we can say it paid off! We're seeing explosive growth with the recovery of the pandemic all around the world."

To fuel the expected boom in growth, Bounce is announcing close of a $12 million Series A round of funding, led by Andreesen Horowitz. Other investors participating include General Catalyst, who led a seed round of funding, announced back in December 2021.

Commenting on the Series A in a statement, Andrew Chen, general partner at a16z, said: "Bounce has shown tremendous resilience throughout the pandemic, continuing to not only build but also grow. By aggregating all different types of SMB supply -- from hotels to post offices to bike rental shops -- they've been able to establish a strong network that they can continue to grow and offer more services on top of."

The new funding will go on fast scaling in Europe -- where key markets it's targeting include Italy, France, and the UK. (Bounce also established a European HQ in Lisbon, Portugal, last year to prep for its regional growth push.)

The Series A money will also be put towards expanding the number of services it offers. Although it's not yet disclosing what additional services are coming down the pipe.

"Bounce has a long list of other services we plan to introduce however we don't yet have a public roadmap of new services," says Candee when asked what else it wants to offer with the help of a growing network of small businesses partners who receive a revenue share for their part in providing services to Bounce users.

The startup has more than 7,000 locations signed up to offer Bounce services at this stage. All locations offer luggage storage -- but only a subset (around 2,000) do package acceptance.

In terms of coverage spread, London currently leads as the city where Bounce has the most partners (200); followed by 170 in Paris, and "dozens" more apiece in other European cities such as Madrid, Rome, Budapest and Dubrovnik.

The revenue split for these partners is "typically" 50-50, per Candee, who confirms that Bounce covers "all fees" for partners -- e.g. payment processing, customer acquisition, marketing signage (such as the below example displayed outside a shop).

Bounce users can pay-per-item (90% of its customers currently do that). But it also offers a subscription option for package acceptance customers and appears to have big plans on that front, with Candee noting that it will be investing more in subscription offerings later this year.

Bounce outdoor sign
Bounce outdoor sign

Bounce signage for luggage storage outside a shop. Image Credits: Bounce

The second of Bounce's two current service offerings -- package acceptance -- launched in March last year.

"The package service was a top customer request, particularly in cities like New York," says Candee. "This is especially useful to them compared to PO Boxes or Amazon lockers because it provides a single nearby location where the customer can get all their packages. Customers don't want to go to one place for Amazon packages, one place for UPS, one place for FedEx. Customers like having a dedicated address they can give out and collect all their parcels from."

He says the goal is, in five years' time, people will "walk down the street and see the Bounce logo and know they can do these 10 different services there".

And while Bounce isn't the only startup trying to simplify luggage storage globally (see the likes of Vertoe), Candee has for years emphasized a wider "platform" vision. Back in 2018 he told us about "broader use cases" which could plug into Bounce's network of bricks-and-mortar locations -- such as having courier services transporting items between different partner locations in order that a user could, for example, drop off clothes at a convenient location for them and have them moved to the dry cleaner and returned back to where they want to pick them back up once the clothes are clean.

Candee also describes Bounce's mission as being to build "the biggest retail chain in the world without owning any stores" -- comparing it to Airbnb vs hotels.

"When the pandemic hit and small businesses lost all of their revenue, we asked them how we could best support them and the resounding answer was finding new ways to drive revenue," he says, adding: "Our goal is to win the hearts of small businesses around the world, helping them grow and diversify their businesses and bringing the power of scalable tech to them. SMB's are typically underserved by the technology industry yet they fuel so much of the economy -- we're excited to be a key player in driving a new way of commerce to all different types of small businesses around the world."

Bounce talks in term of a "BounceBack Program" -- aka, a "pledge" to support small business to "'bounce back' as we continue to climb out of the pandemic", as its marketing puts it. And earlier this month it said it would be paying out $3M to its partners "over the next few months" via this program.

"With BounceBack, we are, in certain cases, offering guaranteed revenue to stores for this period. We’re also investing far more in local marketing," says Candee of this program.

It also recently announced a BouncePlus Program for partners who "go the extra mile to provide the best Bounce experience possible" -- saying that would further dial up benefits via extras such as weekly payouts, tipping, free signage, a dedicated account manager and a featured presence on the Bounce platform.

Bounce says the requirements for getting BouncePlus perks are to: Maintain a high review score; have ~zero “drops” (which means "store hours are up to date and customers always get served"); and that all bags stored must go through the Bounce platform ("providing the highest levels of bag safekeeping").

Depending on how much extra work is actually involved in meeting those requirements, being featured on Bounce's platform offers the promise of 'free' advertising for the SMEs -- which may be offering highly relevant services of their own to Bounce's convenience-minded and/or tourist users, from bike rental or accommodation to selling ice cream and souvenirs, or indeed package sending services -- giving independent businesses an incentive to drive Bounce's quality of service in order to get the best chance of boosting footfall and winning extra business on top of whatever it directly pays them for their work.

With the right mix of locations signed up, the incentives do therefore look very well aligned.

Although the demands of convenience mean Bounce needs partners in certain locations of relevance to users, such as key transport hubs, regardless of whether the services they offer are likely to be of interest to its users -- hence its partners can include businesses such as hairdressers and even offices as well as hotels and tourist-targeting retail outlets.

The original idea for Bounce came to Candee back in 2014, although he didn't start work on the startup until January 2018 -- going on take take in $1.2M in early funding later that year.

He says the idea came to him ahead of a Friday post-work Happy Hour event -- when someone had said he would join but needed to go home first to drop off a bag to avoid carrying it around all night and Candee says it struck him that "people shouldn't plan their days around their things".

"That's when I thought -- wow, this is such a silly problem that so many people have, there should definitely be another way," he adds. "The original idea was more of a vision: Cloud storage for the physical world -- this idea that you could summon your things away from you and back to you, involving storage points around the city as well as delivery drivers moving your bags."

The platform itself launched on Product Hunt in February 2019, ahead of the pandemic. And by November 2021 Bounce was getting 10,000+ new customers storing luggage every month, per Candee.

"The typical Bounce user for luggage storage is 24-35 years old though it's pretty broad including anyone who is traveling or going to events," he says now, adding: "We've seen a large uptick in usage around sporting events, concerts, etc as the pandemic subsides and everyone is eager to get out. Travel is also exploding right now."

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