Over 20 million Americans returned home from college last month with trucks full of stuff destined straight for the basement—boxes of books, bedding and thousands of dorm TV destined to gather dust. For the books, companies like Chegg have built businesses worth in the hundreds of millions just to try to save you money through rentals. So why can’t it work for the more expensive, harder to divvy up TVs? With a planned presence on 300 campuses this fall, Boston area startup CampusTVs think it’s figured out how to make the logistics work. So even as the upstart company rents thousands of TVs to the incoming freshman class, it’s already looking to mobile as its next target.
CampusTVs is an upstart with big friends. Through partnerships with The Home Depot HD +0.3% and Vizio, the startup served 50 campuses this past year across thousands of students at universities like the University of Southern California, where it moved hundreds of rental units alone. But with $2.2 million now in the bank from European-based venture firm Nauta Capital now, the once-bootstrapped company’s now found a third major partner to bring to school. And that’s where CampusTV could really start to get interesting.
“We are often in the dorm room of a college freshman on the first day of their college career,” CEO Scott Pirrello says. “You’ve got a respected campus leader there to install a TV, right alongside your parents. With that trust, there are a lot of interesting upselling opportunities.”
The new opportunity is to help wireless carriers sell their services, to international students at least at first. One of the big four (CampusTV can’t say for competitive reasons) is now working with the startup to rent SIM cards to international students at low rates and without long-term contracts or deposits. That’s what has investors like Nauta’s Dominic Endicott most excited, even with what he says is a $5 billion market for the television and hardware needs of out-of-state and international students alone.
None of it would be possible if not for CampusTV’s original partners, however, California-based Vizio and Atlanta, GA-based Home Depot. Vizio provides the actual goods, 32-inch or 40-inch HDTVs. CampusTVs picks them up from Home Depot, its distributor partner. Then bundled with that is a deal with Roku, which students can sign up for and keep after graduation to add streaming and music to their set-up.
That’s one possible area of trouble for CampusTV in the future–it needs a reliable and sizable pool of responsible students to represent the brand at the local level, putting the onus on remote managers to maintain uniformity and company culture. But there’s also the problem of just getting the TV to the campus rep in the first place. Pirrello works with regional warehouses for summer storage, but for expansion, the company depends on The Home Depot. The home improvement retail giant serves as distributor for CampusTVs, buying inventory from Vizio to in turn sell to CampusTVs. The startup cuts off pre-orders a week before move-in and sends over the order, then picks up the TVs in pallets of 18.
It took a lot of hustle, if not some bluster, for Pirrello to get Home Depot and Vizio to take a chance. Without them, the whole system wouldn’t work at any level of scale beyond Pirello and cofounder Colin Fahey buying the TVs for a higher rate at Costco or Best Buy BBY -0.14% (which they did while serving 7 colleges for the 2012-2013 school year). Luckily, CampusTVs’ TV partner seems to enjoy the brand boost they get from partnering with young entrepreneurs to reach the college demographic.
“Our brand is young, and we are a young company,” says Vizio vice president Paul Hernandez, who called Pirrello back almost a year ago out of curiosity and some skepticism about the pitch. “This is a creative way to go get TVs to people, and students will need to buy a television eventually.” The risk is low on Vizio’s end, too. Smaller batch orders trickle in during the year, but once Vizio’s dropped off its units with Home Depot, it’s made its money. Home Depot, meanwhile, then counts on CampusTVs to make good and pick up.
CampusTVs, meanwhile, is careful to charge upfront, meaning it has money to put back into the business right on day one. Pirrello says students also are typically compliant and rueful when charged for any damages. “The students pay, they’re typically just embarrassed,” he says.
This summer will prove a critical test for Pirrello and Fahey’s team of 7 as the company expects to serve as many as ten times more students as last year overall. There’s a lot of education to do with each and lot of incoming class of 2018 Facebook groups to infiltrate. But not all the company’s TVs are in storage, waiting for those new students for the season. In another push for growth, the startup’s also piloting summer program rentals for temporary or future students. For that, theMerrimack College graduates looked to another local school with a large incoming international population, Harvard, to launch a pilot. Then there’s the carrier partner launch to prepare.
“We have a pipeline of other services, but for now the company is focused on making sure they can execute flawlessly in this year’s TV-rental campaign and then soft-launch [mobile],” its board member Endicott says.
For Pirrello, CampusTVs has a lot of options, even if its name may ultimately prove a bit narrow in its focus. “Once we earn a student’s trust, there’s so many directions we can go,” Pirrello says.
Maybe eventually Pirello can figure out how to legally help students rent each other Netflix and HBO GO accounts.