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$44M-funded Omni pivots from storage to rentals via retailers

Omni simply couldn’t scale storing stuff in giant warehouses while dropping it and off picking it up from people on require. Storage was designed to bootstrap Omni into peer-to-peer rentals of the goods in its care. But now it’s found an acceptable path by partnering with retailers that will host and rent out goods for Omni that users will pick up themselves.

With that strategy, Omni is now formally pivoting from storage, alongside its expansion from San Francisco and Portland into Los Angeles and brand-new York. In SF and its brand-new markets starting today, users can rent GoPros, strollers, drills, guitars and more for pickup and drop-off at 100 local storefronts, which will collect 80 percent of the revenue while Omni keeps 20 percent.

“Storage was always meant to supply a rentals mart. We launched storage in an uber-for everything epoch and now it’s no confidential that physical operations are mighty to scale,” Omni’s COO Ryan Delk tells me. “This brand-new version gives our users more supply, local entrepreneurs a brand-new revenue stream, and us the ability to launch brand-new markets much more quickly than the old version of construction rentals on top of the storage business.”

LA Omni users will be able to rent surf tool for pickup and drop-off from local surf shop Jay’s

To that end, storage won’t come to any more markets, though storage services with delivery will continue in San Francisco. Users there and in Portland will also be able to pick up and drop off rental items from a few Omni-owned locations, including its SF headquarter office. Omni will add retailer pickups in Portland and more in San Francisco soon. At least that’s one path to make Omni’s investors like Highland, Founders Fund, Shrug.vc and Dream appliance feel acceptable about SF real estate prices. Omni also recently doubled the monthly storage price of closed bins in SF, triggering ire from customers, to cover its overhead and encourage storing solo items that can then be rented out.

“Ownership has a bit of a burden associated with it,” Delk tells me, referencing the shifting attitudes highlighted by Marie Kondo and the tidiness movement. Ownership requires you to pay up front for tons of use down the line that may never happen. “Paying for access when you need it unlocks all these unbelievable experiences.”

Omni’s COO Ryan Delk (left) and CEO Thomas McLeod (right)

Omni discovered the potential for the version when it ran a test. “What if we could pick up items directly from Omni?” Delk explains. Omni learned that many people “can’t afford to pay for transit both ways. It was pricing out a lot of people.” But pickups unlocked a brand-new price demographic.

Meanwhile, Omni noticed some semi-pro renters had cropped up on its platform who were buying tons of a well-kown item like chairs on Amazon, shipping them to its warehouse, then renting them out and quickly recouping their costs. It saw an opportunity to partner with local retailers who could give it instant supplies of items in brand-new markets while handling all the pickup and drop-off logistics.

Omni’s retail partners like mission 16 Outdoor & journey Outfitters, Blazing Saddles and Sierra Surf School can specify their own prices and modify for require, set black-out dates, pause for vacations and trade items like normal and let Omni know to restock them so rentals don’t cannibalize their sales. Rentals are covered by up to $10,000 in insurance so both the retailers and people who rent from them don’t have to worry. Omni users just show their ID at pickup to verify their identity, but that will soon be part of the app. Last descend, Omni hired Uber’s head of sales strategy and operations who oversaw UberEats growth from zero to 200,000 restaurants to run its retail partnerships as VP of unique projects.

Delk says Omni is “all-in on the rentals,” which he sees as a “pure play mart versus a recurring ARR business” that “democratizes access to Omni to people who aren’t the 1 percent in major markets.” Now someone who couldn’t afford to purchase a drill for a quick home improvement project or pay to have a rental delivered and picked up can stop by their local retailer to grab it and return it later for $6 per day with no more fees.

That in-store experience of actually being able to go same-day, hold an item and request questions about it could allow Omni’s rental version to challenge with Amazon’s prices and delivery logistics. The one thing Amazon can’t do right now is let you strive before you purchase. Omni could prevail by letting you strive without ever having to purchase.

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TechCrunch
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