Furniture rental startup Feather is taking home a $15,000 cash prize from the National Association of Realtors‘ third annual Investment, Opportunity & Innovation (iOi) Summit Wednesday.
Otso, a commercial real estate company that provides A-rated insurance coverage for lease security as an alternative to traditional cash deposits and letters of credit, won the “Crowd Favorite” award, garnering the most votes out of a total of more than 1,200 votes cast Tuesday.
Feather allows consumers and agents to rent modern furniture through affordable monthly payments and have it delivered and set up for them. The startup is one of 12 contestants to go head-to-head in a “Pitch Battle” hosted by NAR’s for-profit investment subsidiary, Second Century Ventures.
The contenders, a racially-diverse group comprised of three women and eight men, were each on stage for eight minutes: four to present their product using slides and four to get grilled by industry judges, as more than 400 in-person conference attendees and thousands of livestream viewers tuned in.
“This year’s iOi Summit delivered on the promise to highlight trailblazing products and ideas,” said NAR CEO Bob Goldberg in a statement. “Feather is a worthy winner whose furniture rental service is indeed impressive and will no doubt contribute to both the residential and commercial sectors, as well as support Realtors and their clients for years to come, by making the home staging process more efficient.”
Feather has raised $60 million in venture capital funding from Kleiner Perkins, the first investor in Amazon and Google, Spark Capital, the first investor in Wayfair, and Y Combinator, the first investor in Airbnb and DoorDash, according to Jay Reno, Feather’s founder and CEO, who delivered the furniture subscription service’s pitch on stage. The startup will be raising its Series C round of funding “soon,” he said.
Like previous Pitch battle winners BoxBrownie and Curbio, Feather and Otso are participants in NAR’s REACH tech accelerator. Other Pitch Battle contestants that are also REACH participants include Milestones, Parafin, Remarkably and UnderTheDoormat/Hospiria.
Through Second Century Ventures and REACH, NAR has an equity investment in nearly 150 tech companies worldwide, Goldberg told conference attendees Wednesday.
“People were floored that ‘Wow, NAR is involved with that much on technology?'” he said. “Hell yeah we are because we need to be fearless. We worry every year about ‘Oh, we’re going to be disintermediated.’ The reality is … there’s always something new and there’s always something better and the world adopts and the idea for all of us is how do we stay ahead of it. We have to be the leaders in the proptech space. We can’t let others define it for us.”
“Everybody says, ‘NAR better have a seat at the table.’ Hell, we better be the one owning the table.”
According to NAR, Feather outshined the competition by emphasizing how its sustainable model “allows clients to change their style, budget or décor needs in an affordable manner.”
“[Reno] noted that Feather’s unique solution empowers Realtors and their clients not only to stage and sell faster, but also to live in and enjoy their homes all while reducing waste,” the 1.48 million-member trade group said.
Reno began his pitch Tuesday with a bold claim: “The American Dream has changed. It is no longer to buy a house and to have cars and the proverbial white picket fence. Instead, the new American Dream is defined by freedom and flexibility. The ability to lean into whatever feels right in your life, to experience things in your life.”
But ownership holds people back from that new American Dream, according to Reno.
“That’s why many people rent their homes for a long period of time,” he said. “They’ll rent their cars, they’ll take Ubers, Lyfts. They’ll rent their music with Spotify. They’ll rent their movies with Netflix. But what about furniture, the third largest asset that they’ll ever have in their lives? Today everybody owns their furniture and with that ownership it saddles them to a place and does not allow them to have that new American Dream.”
According to Reno, Feather serves three main groups: consumers, primarily in their 20s and 30s who move regularly every few years; offices adjusting to the “new work-from-anywhere lifestyle;” and Realtors “who stage homes and want to sell their homes faster and for more money.”
Renting furniture can be painful, time-consuming, and expensive, he said.
“The furniture is ugly and it’s still generally a horrible experience and there is no national staging company that can work with your brokerage or your partners across many different cities,” he said. “Well, we can. We’re in 12 cities and counting. We make staging simple. We provide a digital-first experience. We provide interior design services. We provide beautiful furniture, speedy delivery, flexible pickup, and most importantly, we’ll sell your house faster and for more money.”
Homes staged with Feather sell for 17 percent more on average and in less than 11 days on average than homes not staged with Feather, Reno said.
The Pitch Battle judges seemed particularly interested in what differentiates Feather from other furniture rental companies.
“What’s the defensible part of this?” York Baur, CEO of MoxiWorks, asked.
Reno replied, “The defensible part is the technology underlying everything we’ve built. We’ve built reverse logistics infrastructure that has to be supported by proprietary technology that we built. There is no software management layer that exists and no inventory management layer that exists for any company to send something to a consumer’s home and then come back at the end; you have to build all of that proprietarily.”
Even companies like Amazon and Wayfair only deliver goods one-way, Reno pointed out. “With our business we’ve had to design everything from the ground up to also ingest that product back at the end.” Reno did not name Feather’s competitors, but did allude to Cort Furniture Rental, which is owned by Berkshire Hathaway and operates in all 50 states.
“We can go to all of the cities as well and serve the same people, but with better furniture,” Reno said. “Furniture that’s designed and built to last. Furniture that suits the style of today and with new software and marketing that speaks to a different generation.”
“We’ll be launching many more cities in the coming year,” he added. “We have fulfillment centers and distribution centers on the ground. The distribution centers are sort of the hub and then the fulfillment centers are the spokes. Those fulfillment centers don’t necessarily need to be owned or run by us as long as they’re using our software. So that can be outsourced to a third party.
“And as far as reverse logistics being hard, yes, that is the moat. Good luck anybody else really trying to come in and do this.”
While there are some “copycat” services that have sprung up, “we are well ahead of all of them and as you do this you get economies of scale really quickly, can go to many cities, and just be the better brand,” Reno said.