Ragin’ Raccoon’s plan to conquer a niche waste market: vacation rentals

Diving Brief:

  • Ragin’ Raccoon, a Philadelphia-based startup founded in 2021, is looking to carve out a niche in the trash industry by focusing on “white glove service” for vacation rental properties. Although the company declined to share detailed financial results, it says the expansion has contributed to a 500% increase in revenue over the past three months.
  • The company says it currently serves more than 300 properties in three markets – Philadelphia; Annapolis, Maryland; and Telluride, Colo. Each market is served by a driver in a modified van, and the company’s app can integrate with property management platforms.
  • To date, Ragin’ Raccoon has raised a small amount of money from the co-founders of real estate firm Rentsidual. The executives say they are unlikely to seek venture capital funding and are currently aiming for organic growth.

Overview of the dive:

The market for vacation rental properties has evolved significantly in recent years due to the advent of technology companies such as Airbnb and Vacasa. While many of these properties are serviced by municipal or private waste haulers, Ragin’ Raccoon believes a more targeted approach is possible.

“We’ve found a niche market that these big players really don’t want to enter and we hope they don’t,” said Founder and CEO Justin Pera. “We’re not just a junk business. We serve vacation rentals, we serve guests.”

Pera started pursuing the idea in 2021 after staying on a site through Airbnb where the property manager asked her to take out the trash and it was still full from previous guests. He initially focused on the trash pickup service in Tampa, Florida, but found the concept not easily scalable. But it was not the top priority of property managers, who reported that holidaymakers tend to litter in larger quantities or more frequently than the local service could cover.

The company got its start doing on-demand or scheduled pickups. Ragin’ Raccoon found this made revenue forecasting difficult, given the seasonality of many vacation rental markets, and recently rolled out a new service that has led to a big increase in revenue.

For a flat monthly fee, the company now offers service each time a customer leaves the facility. Pera said property managers prefer this recurring cost, which they can pass on to owners and guests, and it’s also better for his business. So far, customers in Annapolis and Telluride have been most interested in annual service, while customers in Philadelphia tend to prefer on-demand service.

The company does not currently offer a recycling service, but may in the future. Currently, Ragin’ Raccoon sends its waste to Covanta sites for disposal when possible.

Ragin’ Raccoon says it also avoids the costs of heavy collection trucks and the challenges of hiring CDL-certified drivers.

“Having this requirement right on the doorstep really allows us to have a bigger pool of talent,” said COO Alex Graham, who added that the company is particularly focused on drivers who can interact with guests and entering properties.

Skift, a travel news and market research site, estimates that the U.S. short-term rental industry was worth nearly $57.7 billion in 2021, or 18% of the entire rental industry. accommodation. While that share grew from 10% in 2018, Skift predicted that short-term rentals would see a slower growth rate than hotels in 2022. A proliferation of laws restricting short-term rentals has also affected some markets.

Pera said the recent enactment of such a law in Philadelphia reduced Ragin’ Raccoon’s local revenue by about 10%. At the same time, he pointed out that some West Coast communities requiring garbage collection as part of short-term rental regulations are a sign of market potential. Pera also noted that Erik Tylek Kettenburg, the former chief technology officer of vacation rental companies such as Rented and Vacasa, is an adviser to the company.

Regardless of future economic trends, the company sees the potential to enter several new markets at a sustainable pace. It is currently waiting to enter a market until at least 50 properties are lined up.

“Our approach is slowly developing,” Pera said. “We don’t want to rush out and bomb the market and go somewhere where we don’t have contracts in hand.”

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