Chattanooga-based Bellhops moving up; $6 million raised from investors

Chattanooga-based Bellhops moving up; $6 million raised from investors

November 19th, 2014 by Mitra Malek in Business Around the Region

Bellhops Diego Meraz and Donald McDowell carry a couch into a Walnut Street apartment in downtown Chattanooga.

Photo by Contributed Photo /Times Free Press.

Chattanooga-based Bellhops has raised $6.1 million from California and New York investors, including those who've pushed forward big tech names such as Facebook, Twitter and Paypal.

Also on the list of investors: the rapper Nas.

Bellhops, a 3-year-old business that provides help for people to move, got the lion's share of funding from a $5.1 million investment by Binary Capital. The San Francisco-based venture capital firm was founded by early investors in Instagram, SnapChat and Twitter, according Cameron Doody, Bellhops' chairman and co-founder.

"From the very beginning, they just hustled for us," Doody said. "We could just tell they really wanted us."

Binary founders Justin Caldbeck and Jonathan Teo recently raised $125 million for their new venture firm, and Bellhops was their first investment, "which was a big honor," Doody said.

"We knew we would be valued more by them because we were their baby," Doody said. "And we just personally really liked them."

According to Bellhops, other investors included Lowercase Capital, whose credits include Facebook, Uber and Twitter; Scott Banister whose credits include Zappos, PayPal and Uber; rapper Nas through QueensBridge Venture Partners; and Reddit co-founder Alexis Ohanian.

None of the investors could be reached for comment late Tuesday afternoon, shortly after Bellhops' announcement.

Bellhops' seed money, $1.7 million, had come from Lamp Post Group. The Chattanooga-based venture incubator took on Bellhops two years ago, as the fledgling business grew to offer its service in more than 130 cities nationwide.

The tech-enabled moving company, whose manpower comes from college students, has a full-time staff of 36 in Chattanooga and is hiring to fill another 12 positions. Its network of college movers, or "bellhops," runs 10,000 deep, the company says.

The infusion of cash will allow Bellhops to expand its Chattanooga team and improve its technology, said Matt Patterson, Bellhops' chief operating officer.

Nearly all of the company's full-time staff are recruits from around the country.

To wit: on Tuesday its vice president for strategic marketing and brand, Keith Peterson, started his job. Peterson was the global brand manager at West Hollywood-based Redbull Records.

"Human capital has been the most potent investment we've made," Doody said.

Bellhops closed on the round of investing on Nov. 7, marking the highest out-of-area investment among startups in Lamp Post's portfolio.

"We want our companies to start here, and grow here, and then for companies outside of Chattanooga to be putting their money in," said Tiffanie Robinson, Lamp Post's director of operations.

About a year ago, venture firms started reaching out to Bellhops, but Bellhops wasn't keen on getting more investment until about three months ago, Doody said.

"We decided we wanted to look into fundraising to continue the growth of the company and to have the fire power that we needed to continue ramping up," he said. "One meeting turned into five, and those five turned into 25, and those 25 turned into 100. It exponentially grew."

Bellhops could have secured even more money, but the team decided "to dilute less of our ownership in order to keep our equity," Doody said.

The company has not disclosed its valuation or revenues.

Auburn University graduates Doody, 28, and Stephen Vlahos, also 28, started Bellhops in 2011, then called Campus Bellhops. At that time, the business focused on helping college students move. Soon after, it grew to include small- and medium-sized local moves in general, not just those on college campuses.

Contact staff writer Mitra Malek at mmalek@timesfreepress.com or 423-757-6406.