According to serial entrepreneur Jeff Cavins, more than 35 million people each year look to rent an RV — 38 percent of them so-called millennials. Yet they often walk away from the experience empty-handed. The reason, he says: There are fewer than 100,000 commercially owned vehicles available from traditional rental services.
Cavins says that his San Francisco-based company, Outdoorsy, is beginning to address this issue by enabling owners of the 14 million privately owned RVs in the United States to rent them to users, à la Airbnb.
The vehicles are mostly sitting around collecting dust anyway, says Cavins, who co-founded the company in late 2014 after heading up seven previous companies — two of which were publicly traded.
Intuitively, the platform would seem to make sense. RVs are unaffordable for most people. Storing them is a hassle. And people are increasingly interested in reaching places where home-sharing sites and hotels cannot take them. Think Burning Man, for example, or the annual Coachella Valley Music and Arts Festival.
But Cavins said venture investors “didn’t get it,” when he began pitching the idea to them several years ago. While he secured meetings with all the right firms, he said he was repeatedly ushered politely out the door by people who deemed the idea too risky.
In fact, Cavins says that he and his co-founder and life partner Jen Young wound up funding the company for its first year. During that time, the platform they created, with two “phenomenal” developers, was compelling enough to attract four term sheets from VCs. He turned them down, though. (“I didn’t want to give my company to them,” he says.) Instead, his next move was to enroll the company in NFX, a venture firm and accelerator that works with a small group of companies each year that are focused on “network effects,” or ensuring that both sides of a marketplace keep coming back in larger numbers.
Cavins says Outdoorsy is finding users through Facebook ads, via word of mouth, as well as through “emerging power sellers,” as Cavins calls them. He points to a single mother in Huntington Beach, Calif., who has acquired five RVs and using them to pay for her daughter’s law school tuition at UC Berkeley. “It’s almost like a cottage industry of folks who are running their businesses on our platform from their kitchen tables,” says Cavins.
Altogether, says Cavins, Outdoorsy now has 256,000 users, and he says it’s growing by 21,000 users a month. RV owners set prices, keeping between 80 percent and 94 percent of the total based on their “trust” ranking scores on the site and on how many vehicles they are renting. (The more they rent, the more they keep.) Outdoorsy separately keeps at least 10 percent of the overall rental price, in part to pay for on-demand insurance, along with unlimited roadside assistance, which it secures for renters through several partnerships.
It’s enough momentum that Outdoorsy, which now employs 50 people, just landed a sizable amount of Series B funding: $25 million led by Aviva Ventures and Altos Ventures, with participation from Tandem Capital and Autotech Ventures. (The latter had chipped into the $6.5 million that Outdoorsy raised previously — much of it from Cavins, who’d also taken earlier checks from NFX, Tekton Ventures and numerous angel investors.)
Even still, Outdoorsy has its challenges, of course. A look at some of the inventory Outdoorsy has unlocked shows a lot of pick-up trucks, which would seem to stretch the definition of recreational vehicle, at least in so far as people would probably prefer not to sleep in one (or visit Outdoorsy expressly to rent one).
There are also at least 10 other RV rental companies, including Mighway and Campanda. And Outdoorsy has Airbnb itself with which to compete. Along with homes and other vacation rentals, Airbnb connects its users to RVs and campers.
Cavins argues that unlike these companies and Airbnb in particular, Outdoorsy’s users “connect emotionally” because unlike with Airbnb, where hosts and guests often never meet, Outdoorsy’s hosts have to meet renters in person in order to train them how to use their vehicles. (He insists that he has seen “families become best friends” and even “people get married” as a result.)
Airbnb has also somewhat famously had issues with renters destroying property. Asked how Outdoorsy handles the same challenge, the company explains that its insurance is “episodic” commercial insurance that covers all states, provinces, jurisdictions and territories. Once a consumer goes through Outdoorsy’s DMV check — the company says its software can do this in 20 seconds — he or she is approved for the insurance and covered up to $2 million for a trip. The insurance protects the owner, the renter and any third party in the event of an accident.
Cavins doesn’t mind being compared to Airbnb, as you might imagine. He suggests that in some ways, the two are very alike, pointing to the two companies’ respective focus on partnerships. Cavins notes that, among other things, Outdoorsy is working with numerous event organizers with the hope that in the not-too-distant future, when a customer buys a ticket to a NASCAR race or to a music festival, that person can also book a parking pass and an RV stocked with a favorite champagne.
Looks like the continuation of the expansion of the sharing economy.
Check out my related post: Why some seniors are staying in work campers?