Doorage is raising at a $17.5 million valuation cap with no discount. Given how recently Doorage has emerged into this market — one that does have much competition — there are questions as to whether or not Doorage will be able to grow fast enough to validate this high of a valuation. Therefore, Doorage’s price score is its lowest across all five metrics.

Doorage operates at the intersection of the self-storage and moving markets. This works out well for Doorage, as the moving industry has an estimated market size of $14.4 billion. However, it is also expected to shrink by up to 21% in 2020. The self-storage industry, on the other hand, was valued at $37 billion in 2018 . This market is projected to continue increasing, as it is estimated to rise up to $49 billion by 2024. The rise in urbanization across the United States has led more and more people to use self-storage facilities as apartments have limited space.  

Doorage is facing negative market growth on one side — moving — and positive growth on the other — self-storage. However, the obtainable self-storage market for Doorage is limited by more established competitors the company must face. Thus Doorage’s market score is relatively low.

Doorage was founded by Sean Sandona. He previously founded North Village Group (based in Elk Grove Village, Illinois) in 2009, which provides commercial snow and ice management services and specialty construction services. He appears to still be a Chairman for the company today. 

Sandona is joined by a team of strategic advisors, such as Ben Brownback (CEO/Executive Producer at The B2 Group), Wilbur You (CEO and founder of marketing and advertising company, Youtech.), and Jerry Richman (Partner at Richmond Breslin LLP).

The team draws from a wide array of industries, but none have experience in the storage or moving industries. However, Sandona does bring past entrepreneurial experience to the company. These factors yield Doorage an above average team rating.

At face value, it may be easy to write Doorage off as just another storage company that may or may not have a chance to break into the market and operate as a profitable business. However, there are some key ways in which Doorage stands out from their competitors.

Doorage’s payment plan is something that may be attractive to many customers. A different storage company may force the client to rent an entire unit, regardless of whether or not they have enough items to fill it. Doorage provides customers with more flexibility through its storage-by-volume price model. This unique pricing structure is likely to appeal to a much wider customer base, perhaps even drawing in people who would not otherwise spend money on self-storage services.

Finally, what makes Doorage most unique from its competitors is its pick-up service. Most storage facilities are just that — storage facilities. If you’re a Doorage client and need to move across the country, all it takes is using its proprietary instant quote system and booking with a single click. Doorage supplies its own moving containers and deals with all of the hassle of transporting the customer’s belongings to their new location — a system that is designed to alleviate as much stress as possible for the customer. This is a strong departure from Doorage’s competitors.

These may seem like strong differentiating factors — and they are. However, they are also easily replicated by more mature competitors. Doorage holds no technology, patents, or other intellectual property that would prevent other self-storage companies from replicating its model. Thus, the differentiators score for Doorage is middle-of-the-road.

Doorage’s performance thus far has been promising. It has had over 1,200 customers to date in its Chicago market, accruing $1.1 million in revenue since its launch in spring 2018. It has grown at a rapid rate since opening operations in 2 new markets (both opened in 2019), closing August 2020 with a 351% increase in revenue year over year.   

Doorage is also in the midst of an acquisition in Cincinnati, which will allow it to expand into six new markets. The success that it has shown in its home market of Chicago bodes well for the company’s chances to replicate these results in similar cities across the Midwest.

The overall financial outlook for Doorage also looks solid. With its core subscription-based storage business, it has managed a $32k/month of MRR (monthly recurring revenue) throughout 2020. This consistent revenue has allowed Doorage to pay off its long-term debts ($864k down to 628k in the most recent fiscal year), while taking on slightly more short term debt. Thus, Doorage’s performance score is its highest.

While Doorage has shown that it has the potential to become a successful business in its home market of Chicago and nearby cities, there are certainly questions when it comes to scalability. Different areas of the country provide different challenges — there is no guarantee that Doorage is capable of making the transition from a regional company to national company.

The business also prides itself in its perfect record — the CEO claims that Doorage has never lost a single storage item. For a small business that operates on a recurring revenue model, building trust with your core customers is integral to future success. As the company continues to expand, this perfect record will be tested. Any lost item or compromised facility could lead to disappointing results from Doorage in the long term, as consumers could lose trust in the company.

Lastly, it is also worth noting that there is established competition in the self-storage industry. Doorage has worked hard to set itself apart from its competitors through its storage-by-volume price model and pick up service. However, these attributes are easily recreated by other companies that already have brand name recognition among consumers. As Doorage expands its footprint, it will need to maintain its differentiated edge — which may grow increasingly challenging.

Doorage has a relatively proven track record — albeit on a small scale — with solid financials to back it up. The business plan is strong, and differentiates itself from other companies operating in similar spaces.

The business is growing at rapid rates, and the possible expansion into six other Midwestern cities would only accelerate an already high growth rate. Not to mention, the prospect of opening a branch in Houston — the largest single market in the U.S for the storage industry — in 2021 also bodes well for the trajectory of the company. Doorage could be on the path to rapid expansion and revenue growth if things continue to go smoothly for the company.

Doorage is attempting to change the self-storage industry through its unique price model and pick up service. The company has had a strong start — more than $1 million in revenue already and a healthy revenue growth rate for the latest year. Doorage has plans to expand into further cities, which is another encouraging sign for the company.

However, there are concerns that investors should consider. The company’s valuation seems quite high given its current stage of development and growth. There is no proof yet that Doorage will continue to see rapid revenue growth as it expands — especially considering that the company will certainly have to spend capital to support these new locations. The sole founder has entrepreneurial experience, but he has not worked in the self-storage industry before. While he may have the skills to create a successful small business — as shown by North Village Group — it is unclear that he can grow Doorage to such a scale that investors would see significant returns. Lastly, there is also the risk that competitors may replicate Doorage’s pricing model or pick up service. If that were to occur, Doorage would no longer hold an edge over more established companies in the market. Therefore, Doorage has been rated a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Ethan Thomas.