Online furniture rental start-up Furlenco raises $30 million
Bengaluru: Online furniture rental start-up Furlenco (Kieraya Furnishing Solutions Pvt. Ltd) has raised $30 million in a Series B funding round led by existing investor LightBox Ventures, said a senior company executive.
The fresh round comprises a mix of equity and debt funding.
Furlenco raised $15 million in equity from LightBox Ventures, with participation from new investor Axis Capital, a Hong Kong-based fund, and high net-worth individuals including Gautham Radhakrishnan, partner at Tata Opportunities Fund, among others.
The $15 million in debt came from banks such as HDFC Bank Ltd, Kotak Mahindra Bank Ltd and Axis Bank Ltd, apart from venture debt firm IntelleGrow and undisclosed family offices, founder and chief executive officer Ajith Mohan Karimpana said.
The fresh funds will be used to expand beyond Bengaluru, Mumbai and Pune, where Furlenco currently operates, to Delhi and Hyderabad in the next 12 months as well as expand its product offerings.
Furlenco designs the furniture it offers for rent on its platform. The company has partnered with five manufacturing units spread across Nagpur and Pune in Maharashtra, Chennai in Tamil Nadu and Bengaluru in Karnataka.
According to Karimpana, the $15 million in equity funding will be invested in operations and expansion and the debt funding in “creating assets”, i.e, designing and manufacturing furniture.
“For us to grow, we need more furniture and that furniture has to be funded. Previously, we put all our equity money into furniture and proved that this (furniture rental) asset class works. People should be able to accept our offering, pay us on time, and with that money we should be able to run our company and generate cash to prove to the debt folks that this business works. We did all of that,” said Karimpana.
“We don’t have to start our selling process from zero every time. We have a subscription-based model. I already have a set of customers from last month and before, who are paying me rent every month, which I can use to service debt. This gives debt guys confidence. It is all a bet on the past,” he added.
The company claims to service about 2,000 bookings every month, with an average ticket size of Rs3,000.
Furlenco raised $6 million from LightBox Ventures in a Series A funding round in March last year.
A number of rental start-ups across furniture, fashion and lifestyle and self-drive cars have emerged in the last 24 months. The online furniture rental space has seen the emergence of Accel Partners and IDG Ventures-backed RentoMojo, which has raised $7 million so far, and Cityfurnish, which has raised an undisclosed sum from Citrus Pay co-founder Jitendra Gupta.
Fashion rental and resale start-ups have also attracted investments from venture capital firms in the recent past. They include Flyrobe, Elanic, Envoged and Zapyle. Car rental start-ups such as ZoomCar, Myles, Revv, Just Ride and Voler Cars have also attracted investments from venture capital firms, including Sequoia Capital.