Move Loot

What did it do?

Move Loot was an online marketplace for people looking to buy and sell second-hand furniture. The company collected the seller's furniture, photographed it professionally, sold it on its site and delivered it to the buyer, taking a cut of the sale price in return.

Why did it shut down?

After a $2.8 million seed round in June 2014, the company's total funding reached $21.8 million. In spring 2015 it switched to a model of distributing from large warehouses, and according to a former employee, New York and Los Angeles, opened to hit the targets set for new investment, ran at more than twice the expected cost. Costs grew faster than revenue; layoffs that began in October 2015 were followed by a second wave in which entire city teams were disbanded. In November 2015 and March 2016 the company changed its model, opening up to other shops and to sellers who uploaded their own photos, but by May 2016 only the founders and a few executives remained. Move Loot ceased operations on 29 June 2016.

The story

Move Loot was a start-up launched in San Francisco in 2013 by four friends with a storage room and deliveries they made themselves. Bill Bobbitt, Jenny Morrill, Ryan Smith and Shruti Shah thought selling second-hand furniture was full of sloppy listings and deliveries that were hard to arrange. Their solution was to take on the whole process: Move Loot collected the furniture from the seller, photographed it professionally, sold it on its site and delivered it to the buyer.

The idea caught investors' attention. A $2.8 million seed round closed in June 2014, and with the participation of Google Ventures, First Round Capital, Index Ventures, Y Combinator and Metamorphic Ventures total funding reached $21.8 million. After the Bay Area the company expanded to New York, Los Angeles, Raleigh, Durham, Charlotte and Atlanta. By October 2015 it had reached 100,000 users, 150 movers and 12 retail partners.

Growth, however, was expensive. In spring 2015 the company switched to a model of distributing from warehouses in major cities. As one former employee tells it, New York and Los Angeles, opened to hit the expansion targets set for new investment, ran at more than twice the expected cost. Costs grew faster than revenue; layoffs that began in October 2015 were followed by a second wave in which entire city teams were disbanded.

The company changed its model, opening its doors first to other shops and then to sellers who uploaded their own photos, and extended delivery nationwide. But by May 2016 only the founders and a few executives were left, and complaints from customers who had not received their orders were piling up on social media. On 29 June 2016 Move Loot announced in an email to customers that it was ceasing operations, saying it would complete outstanding orders and refund customers' money.

Lessons for founders

• In a marketplace that collects, stores and delivers physical goods, do not expand without verifying logistics costs city by city.
• Chasing growth targets to raise investment can make an unproven model even more expensive; prove profitability in one city first.
• Cutting off communication with customers when you are struggling destroys trust fast; complaints that went unanswered in Move Loot's final months made the closure far more painful.

Sources

1. The startup that wanted to dethrone Craigslist is officially shutting down (Business Insider, 2016-06-29)
2. Move Loot (Wikipedia)
3. Move Loot Raises A $2.8M Seed Round To Expand Its Online Furniture Consignment Store (TechCrunch, 2014-06-09)

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