Only four years after launching an on-demand moving business, a pair of Auburn University graduates have secured the biggest one-time venture capital investment of any Chattanooga startup company.
The Chattanooga-based Bellhops, which got its initial funding from the Lamp Post Group in Chattanooga and raised an initial $6 million of venture funds in November 2014, closed a $13.5 million round of additional funding this month from some of the top startup investment companies in the country.
Canaan Partners, a Westport, Conn.-based investment fund focused on visionary new IT and health care companies, helped arrange the latest round of venture funding for Bellhops to help the growing company add staff and enter more markets. Canaan Partners led the funding round that included Lowercase Capital, Bullet Time Capital and Binary Capital, which had also participated in the first round of venture funding for Bellhops.
"This is a big win for us," said Stephen Vlahos, the 29-year-old Auburn University graduate who joined with his college colleague Cameron Doody to start Bellhops in 2011. "We've grown the company to a point in size and life cycle where we need to bring on some pretty talented, experienced professionals and this will help us do that."
Bellhops uses about 8,000 college students employed as independent contractors to help consumers move their household goods and furniture in 88 cities across the country. About 4,500 of those are actively working on moves as ordered through the web-based, on-demand service.
The company employs about 65 employees at its 12,000-square-foot rented headquarters in Warehouse Row.
Bellhops offers a unique, and lower-cost option, for many to move and is poised to claim a bigger stake in America's $80 billion-a-year moving, storage and relocation industry, Doody said. In addition to growing in new markets, Bellhops is working to secure more business in the markets where it already operates and is looking at related new transportation services.
"We want to fundamentally revamp the moving industry and this extra funding will help us in that mission," Doody said. "We're trying to build a world-class team and we want to recruit some of the best programmers and managers to Chattanooga."
Doody declined to detail revenue numbers for the privately held company, but he said Bellhops has been growing five-fold every year since the company relocated to Chattanooga in 2012. Although an expanded board is being assembled and new managers hired, Doody said the founders and chief operating officer Matt Patterson will maintain majority ownership in the company, which they said they want to keep and grow in Chattanooga.
Bellhops' service is different from other startup movers and haulers — including Dolly, Buddytruk, Ghostruck, Wagon and Pickup — because it offers a variety of moving services and charges an hourly rate. The company doesn't transport its customers' belongings on its own trucks but supplies the labor to help others move with their own or rented trucks.
"We offer a very affordable and secure means of moving," Doody said.
Bellhops won Chattanooga's Spirit of Innovation award in 2014 from the Chattanooga Area Chamber of Commerce.
The $13.5 million of extra capital funding raised this month for Bellhops tops even the $11.5 million purchase of the Chattanooga-based Quickcue by OpenTable in 2013.
"This level of funding from these type of investment firms shows that Bellhops and the Chattanooga market is growing up and playing in the big leagues," said Jack Studer, a partner in the Lamp Post Group who worked with Bellhops in its early days. "To gain the support from investment firms of this quality should be a big boost for Bellhops and help Chattanooga to grow its tech and startup community."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.
Updated Dec. 29 at 11:35 p.m.