Furniture rental start-up Furlenco in talks to raise equity capital up to $15 million
New Delhi: Furniture rental start-up Furlenco is in the process of raising equity capital of $10 to 15 million from new and existing investors, three people aware of the talks said.
Besides early investor Lightbox, Furlenco is in talks with other venture capital firms for the round. Mint could not ascertain the identity of the new investors.
If the funding comes through, Furlenco is likely to use the proceeds to launch operations in Hyderabad and Chennai, where it is setting up warehouse infrastructure.
Furlenco’s rival RentoMojo raised $10 million from Bain Capital last year.
Furlenco chief executive Ajith Mohan Karimpana did not respond to calls and messages seeking comment.
Operated by Bengaluru-based Kieraya Furnishing Solutions Pvt. Ltd, Furlenco raised $15 million from Lightbox in tranches over the last two years after the VC firm’s first investment of $6 million in 2015. The firm has also raised debt at regular intervals to support business operations.
Furlenco raised about $3 million via non-convertible debentures recently, according to company filings with the Registrar of Companies for January and February.
About Rs8 crore came from debt firm Trifecta Capital and another Rs10 crore from a group of high net worth individuals, namely, Rekha Hrishikesh Mafatlal of the Arvind Mafatlal Group, Lakshmi Narayanan, ex-vice chairman of Cognizant, and the M. Krishna Sindhuri Private Trust.
In the preceding months, it got a Rs5 crore credit line from LendingKart and a Rs2 crore investment from actor Aamir Khan. “Furlenco designs its furniture and invests in assets, so it raises debt on an on-going basis from HNIs and NBFCs,” one of the persons mentioned above said on condition of anonymity.
Currently, Furlenco is servicing various term-loans raised from HDFC Bank, Axis Bank, InnoVen Capital and IntelleGrow, among others. The company’s total outstanding dues were Rs69 crore as of 31 March 2017, up from Rs20.2 crore a year ago, company filings showed.
Among the top 10 fastest growing firms in Asia-Pacific, according to a recent survey by The Financial Times, Furlenco is considered to have single handedly hooked Indians onto the concept of renting furniture.
It invests in furniture which it owns, stores in warehouses setup around key markets—Bengaluru, Maharashtra and National Capital Region—and delivers using third-party logistics services. The products are bundled and offered on monthly rental plans.
Started out of Bengaluru in 2012, Furlenco expanded to Mumbai and Pune and subsequently to Delhi-NCR last year. The company saw a near 200% rise in sales to Rs24.3 crore in 2016-17, even though net losses more than doubled to Rs47.9 crore in this period, company filing showed.
Ajith Mohan Karimpana, a former Goldman Sachs executive, is the founder and chief executive of Furlenco, which started as Rent Ur Duniya.
RentoMojo, which has home appliances and two-wheelers on offer besides furniture, is the only large competitor to Furlenco, even though several new companies like Rentickle and CityFurnish have entered the space.
RentoMojo is backed by IDG Ventures and Accel Partners, while Rentickle recently raised $4 million from CX Partners and ThinKuvate, a Singapore-based VC firm last year. PepperFry, which sells furniture online, also launched rentals recently.
Besides furniture, several car rental firms have also attracted large VC funding. These include ZoomCar, Myles, Revv and Just Ride. Simultaneously, start-ups have come up that offer fashion apparel on rent.