When Empty Space Earns Money: Neighbor Brings a New Dimension to the Sharing Economy
To begin with, it is useful to explain what the sharing economy actually is. Simply put, it is about using what already exists, but more efficiently. The core of this concept is temporary access to resources or services without the need for direct ownership. Technology has enabled its global expansion across various sectors—from accommodation and travel to services and entertainment. However, this economic model is not new. One of the most well-known platforms of this kind is Airbnb, which has been operating since 2007 and offers private apartments for accommodation or the option to share an entire apartment with the owner. For cheaper travel, there is ride sharing via BlaBlaCar or car sharing, where you can rent a car in your area for a certain period of time. An entrepreneur who lacks workspace can rent an office through the WeWork application. Other examples include Spotify, as well as platforms for educational purposes or peer-to-peer lending. Sharing surplus food and clothing is also an interesting example.
Affordable Storage for Rent
Another company in this segment is the U.S.-based Neighbor, headquartered in Utah. It has offered owners of empty garages, warehouses, or even individual rooms the opportunity to rent them out as storage spaces. According to the company’s CEO, Joseph Woodbury, people can store various items in different volumes—from cars to just a few boxes in someone else’s closet. This represents a win-win situation for both sides. According to Woodbury, on the one hand it generates additional income for owners, while on the other it provides convenience and flexibility for customers near their place of residence. The company was founded less than ten years ago, in 2017, and has already expanded across the entire United States. It presents itself as trustworthy, as it offers financial insurance for stored property for both owners and users. Neighbor’s business plan thus shows that it is possible to operate even in such a non-traditional and capital-intensive field.
Rocket Growth
In a short period of time, the young company managed to secure significant financial resources exceeding 70 million USD through several funding rounds. The largest capital injection, 53 million USD, was received back in 2021, with investors including Andreessen Horowitz and, according to TechCrunch, the CEO of the delivery service DoorDash. The company itself earns revenue through a variable service fee from each rental, generated by an algorithm. Neighbor is not a publicly traded company and therefore does not have to disclose its financial results. According to information from TechCrunch dating back to 2021, the company’s revenues at that time increased fivefold, along with a sevenfold increase in bookings compared to the previous year*.
An Opportunity Accompanied by Pitfalls
The potential of the sharing economy is also supported by data from TechNavio, which states that by 2029 it is expected to grow by 1.11 trillion USD, with a compound annual growth rate of 32.3%. [1] In addition to being an attractive investment opportunity with the potential to monetize unused spaces or share them with others, the sharing economy also impacts the environment. For example, when storage spaces are shared, there is no need to build additional commercial warehouses, which reduces waste, emissions, and conserves natural resources. The flip side of the coin, however, points to potential regulatory obstacles. The expansion of so-called peer-to-peer models is happening faster than legislation can adapt, which may later bring additional costs or restrictions. A larger issue may arise when sharing as a source of passive income turns into a full-time business, as has happened with Airbnb. Investors began purchasing apartments specifically for rental purposes, thereby reducing hotel profitability and negatively affecting local communities, as seen for example in Barcelona. It should be noted, however, that these risks are not as pronounced in the case of Neighbor. Moreover, providers are mostly ordinary individuals, and it must be taken into account that service quality may be inconsistent, which can affect reputation or lead to difficulties in resolving potential issues or damages. Last but not least, racial or other forms of bias may also occur.
In conclusion, we can state that the sharing economy still has much to offer the world, and Neighbor suggests that it is expanding into areas that may have seemed unthinkable just a few years ago. Experience shows, however, that this market is also evolving and influenced by multiple variables. Neighbor itself has expanded rapidly, and it will be worth watching whether the company manages to expand beyond the borders of the United States.
* Past performance and historical operating indicators are not a guarantee or a reliable indicator of future results. Since more than five years have passed since the publication of this information, these data may not reflect the company’s current financial situation or operating results.
[1] Forward-looking statements are based on assumptions and current expectations that may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.
This text constitutes marketing communication. It does not represent any form of investment advice, investment research, or an offer to engage in any transactions involving financial instruments. The content of the text does not take into account the individual circumstances of readers, their experience, or their financial situation. Past performance is not a guarantee or prediction of future results. These statements are not guarantees of future performance. INVESTAGO is a registered trademark of Wonderinterest Trading Ltd, which is regulated by the Cyprus Securities and Exchange Commission (CySEC).
