Mumbai: Furniture and appliance leasing startup RentoMojo is in discussions to close a fresh funding round of up to $40 million from existing investors as well as a new investor, said two people aware of the matter.
The startup, owned and operated by Edunetwork Pvt. Ltd, offers furniture, electronics and bikes on lease in Mumbai, Delhi, Pune, Bengaluru, Chennai, Hyderabad, Noida, and Gurugram.
Founded by Geetansh Bamania, the firm also offers free relocation, maintenance, and product swap facilities on the leased items, according to its website.
Existing investors Accel, Chiratae Ventures and Bain Capital Ventures are expected to take part in the new round in which Japanese investor GMO VenturePartners will also invest, one of the persons mentioned above said on the condition of anonymity, as the talks are private.
The startup appointed investment bank Jefferies Group about a month and half ago to advise on the fundraise, the second person mentioned above said. RentoMojo plans to use the funds to accelerate its growth, expand to more cities and go deeper in its existing businesses, the second person said.
RentoMojo, GMO, Accel , Bain and Chiratae did not respond to emails seeking comment. A spokesperson for Jefferies chose not to comment.
GMO VenturePartners is the startup investment arm of Japan’s GMO Internet Group, which is involved in internet infrastructure, online advertising and internet financial services. The venture arm has backed more than 25 startups in Japan and over 40 globally, including three in India. It also runs the GMO Global Payment Fund, which is focused on backing innovative payment startups globally. It has tapped this fund to back online payment gateways Mobikwik and Razorpay in India. GMO has also invested in truck logistics platform LetsTransport.
For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.
RentoMojo started as a furniture rental platform but quickly modified its business model to promote itself as a fintech or leasing company, which provides consumers with a viable alternative to traditional EMIs by offering rental options across various product categories.
“After we launched an 18-month rental option, we thought we were behaving like an EMI company. So why not offer it on other products? A bank doesn’t differentiate whether the EMI is coming on phones or on a bike. That was a natural extension of our thought," Bamania said in an interview in August last year.
While appliances currently comprise around 40% of Rentomojo’s total sales, smartphones as a category is expected to grow significantly to account for 40% of sales by March 2021, Bamania told Mint. For fiscal year 2017, the company posted a loss of ₹22.4 crore on total income of ₹15 crore.
RentoMojo competes with startups such as Furlenco, a furniture rental firm. Furlenco too is in the market to raise up to $50 million, according to reports. Furlenco is backed by investors such as Lightbox Ventures, Crescent Enterprises and Trifecta Capital.