See the original story in Japanese.

Tokyo-based Airporter, the Japanese startup offering the same-day travel luggage delivery service to/from selected airports in Japan under the same name, announced on Monday that it has secured a series A round. Details of financial terms have not been disclosed, but the funding amount is expected to reach several tens of million yen (hundreds of thousands of US dollars).

Participating investors in this round were Base Partners, Monex Ventures, and Mizuho Capital. For the startup, this follows their seed round back in March of last year securing seed round funding from Base Partners and Beenos. The startup will use the funds to form more tie-ups with hotels, improve user interface, and strengthen logistics systems.

Launched as a beta version back in December of 2016, Airporter offers the same-day travel luggage delivery service between selected hotels and airports in Japan so that visitors can enjoy their time without carrying their luggage from their landing at their destination airport until their hotel check-in or the one from their hotel check-out until the take-off at the airport. “So we can help visitors make the most of their time pockets for sightseeing”, said the startup’s founder and CEO Kunio Izumitani.

When Izumitani was previously running almost 10 vacation rental rooms, he recommended guests to use coin lockers if he was requested to keep their language after check-out until leaving for the airport. However, coin lockers that can hold a large suitcase are available only in limited locations, usually located only near public transit stations, which caused some guests to complain about such an inconvenience to him. With this incident, he came up with the idea that he can carry their luggage directly to the airport on behalf of these guests. Airporter has partnered with luggage storage at airports in Japan so that visitors can drop-off (for arriving visitors to ask for delivery to their hotel) or pick-up (for departing visitors who asked for delivery at the hotel) their luggage there.

Currently operating the service in Tokyo and Osaka, the company has partnered with hotels owning 40,000 guest rooms in Tokyo alone, which accounts for the entire accommodation capacity in the Japanese capital city and is now their major channel for customer inflow. This strategy has been successful, and the company now sees 20% growth on a MoM basis in volume of luggage handled. Their profit margin is heavily dependent on the loading ratio of a delivery vehicle. Currently, the demand of delivering luggage from hotels to airports is much higher than vice versa, so the company’s challenge from now is to increase demand for the latter.

Izumya told The Bridge:

We haven’t yet started with international promotion appealing the demand of delivery luggage from airports to hotels in Japan. We first expect to dominate the demand from hotels to airports.

In addition, we were told that Airporter has prospects for securing other demands to increase the loading ratio from airports to hotels. In the future, the startup also expects to expand its business into the direct airport delivery dealing with what visitors buy at shops on their final day before leaving Japan so that they can hop around to enjoy the last-minute shopping without carrying heavy items.

Seoul, Hong Kong, and some other cities offer “city check-ins” where visitors can check-in their luggage in downtown before going to the airport. However, such a service is not available in many cities around the world, including Tokyo and Osaka, which forces visitors to carry heavy items between their airport and hotel. In the meantime, I have recently seen similar luggage services many times from the traveler’s point of view, such as AIRPORTELs in Bangkok, DUBZ in Dubai (recently acquired by major ground handler Dnata), Airportr in London, AtYourGate in major US cities, and LuggAgent in Hong Kong. It’s interesting that many of these services are run not by existing shipping firms but by emerging startups.

Izumitani shared his insights about the possible reasons:

• Existing shipping companies have built their network in a hub-and-spoke manner, which is less optimized for the same-day hotel/airport luggage delivery.
• For hotel/airport luggage deliverers, they merely face the situation that recipient is absent, which can ultimately decrease the need of re-delivery and cost for it.

Meanwhile, it’s also an urgent issue for startups like them to create barriers to potential competitors by increasing partnerships for customer acquisition. In Japan, Japanese startup Ecbo, offering on-demand luggage storage service at retailers and hotspots in major Japanese cities, has announced a new service called Ecbo Delivery, allowing visitors to drop-off their luggage at a major public transit terminal and ask for delivery to their hotel.