This startup just raised $2.5 million to be the 'Airbnb for storage' - here's how it works

The Salt Lake City-based company calls itself the Airbnb of storage.

Neighbor connects people who have unused spaces with people in the area looking for a place to keep their things.

Hosts share details and images of their unoccupied areas on the website, and people can choose one depending on the size and location that's right for them — in a neighbor’s house, for example.

For renters, a peer-to-peer storage platform solves a lot of problems.

In addition to accessibility, Neighbor offers renters the flexibility of time and size as well as security.

There are no restrictions on the minimum or maximum amount of time that a renter and host must agree to and the spaces range from small closets that store three boxes to a large lot that stores three buses.

Storing your things in a home also removes the risk of theft that renters assume when they use storage spaces. Neighbor uses Facebook's All Mutual Friends API — the same one used by Tinder — so that renters have the option to search for hosts who they have mutual friends with.

For hosts, co-founder and CEO Joseph Woodbury says Neighbor is a better choice than Airbnb, because of the minimal maintenance it requires and the variety of spaces that can be rented out.

“A lot of people have talked about Airbnb as 'passive income,' but there's still a little bit of work involved there,” he said. “You gotta move out of your space, they come for two days, then you clean up after them, then you go get another customer.”

With Neighbor, you can sit back and get a monthly deposit in your bank account once items are situated, “essentially for doing nothing,” said Woodbury.

The relationship between the host and the renter doesn't have to be super invasive.

Neighbor has a built-in messaging platform for renters and hosts to use during the rental period, but access is pre-decided, since the host chooses their preference when the space is posted: They can opt into 24/7 access, business hours only, or by appointment only with 24 hours notice.

"[By appointment] works out great for the vast majority of people, because most people access their stuff about once every six months," Woodbury said.

Payments are handled entirely through Neighbor's website and can range from $18 (26 square feet) to $300 (576 square feet) a month.

Neighbor's algorithm calculates a suggested rent amount based on the size, safety of the location, and the “amenities” available (smoke detectors, security cameras, and lockable doors, to name a few), and then gives the host the option to stick to the suggested range or go outside of it.

Neighbor's liability agreement protects both parties from damages.

Hosts are liable for anything they damage themselves, but Neighbor covers renters for anything that’s out of the host’s control, like a flood or a fire.

"We want our hosts to feel safe in this transaction as well. Like they're not bringing a bunch of liability into their lives,” said Woodbury.

As part of the agreement, renters have to disclose what's being stored, although specifics like brand aren't necessary. Insurance even covers damage to the location, for up to $10,000.

Neighbor plans to use the $2.5 million funding for expansion, to market its service in cities around the country.

So far, growth outside of Utah has been completely organic, since Neighbor has been putting its resources towards building its website and the beta version of its app (the app is only for hosts right now, though Woodbury said it will incorporate the renter's experience later this year).

This will be a crucial step for the startup, since a major advantages of using Neighbor over self-storage is proximity to the location. When you type in New York City today, only two listings appear and they're both in New Jersey. San Francisco, California, doesn't offer any.