Toronto-based consumer storage and logistics startup Second Closet announced in March 2021 that it has raised CAD 20M in a Series A extension round co-led by Whitecap Venture Partners and Intact Ventures. MIG, Michael Hyatt, and Cowie Capital Partners also participated in the funding round.
The startup will use the proceeds from the funding round to grow its B2B play by increasing its product development team and hiring new executive-level employees. The startup expects to reach 600 employees by the end of April. It is also currently focused on expanding its Canadian footprint and acquiring more business customers nationwide.
About the startup
Second Closet was founded in 2017 as a tech-driven consumer storage enterprise that operated a digital platform along with the physical movement and storage of goods. Over the past four years, the company has established nine facilities across Toronto, Vancouver, Ottawa, and Montreal, and worked with tens of thousands of clients. The B2B startup provides e-commerce and retail fulfillment including storage and shipping, in addition to physical file and business asset storage.
Second Closet is expecting a four times revenue increase this year. That growth is also visible in the size of Second Closet’s team, which propagated from 75 employees in late 2019 to around 450 currently, including drivers, engineers, operations, and more.
Identifying a chance to utilize what Second Closet had originally built as a way to store individual goods, Whitecap encouraged the startup to increase its possible scale opportunities, and focus on B2B. Commenting on the same, Shayn Diamond, partner at Whitecap said they sat down with Mark (CEO) and the rest of the team and said, is there a path here to repeat what they’d done with one or two early pilot [business] customers, and over the next three years sort of flip the script so that they could get 50-50 business to consumer.
Those discussions, which concluded in Whitecap leading Second Closet’s Series A funding round, came at a suitable time as the COVID-19 pandemic hit shortly after the startup secured the $13M.
Statements from the stakeholders
CEO Mark Ang said it was definitely a “wind in our sails” when everything closed and became digital, we were already doing it. He added that it was hard to turn on infrastructure overnight with warehouses, people, technology, trucks, etc., there was a lot to coordinate. It was the pre-work, the vision that that’s where they wanted to go as a business in advance. He concluded by saying that by setting up and working well in advance of the COVID-19 pandemic hitting, they were able to capitalize by supporting other businesses.
Karim Hirji, SVP and managing director at Intact Ventures said Mark and team have done a brilliant job in scaling Second Closet to meet the needs of consumers and businesses, applying technology and modern processes to deal with many of the pain points of traditional e-commerce logistics.
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