The news: Online furniture rental start-up Furlenco has raised $30 million in a Series B funding round led by existing investor LightBox Ventures, said a senior company executive. The fresh funds will be used to expand the company’s presence beyond Bengaluru, Mumbai and Pune, which is where Furlenco currently operates, to Delhi and Hyderabad in the next twelve months as well as expand the variety of its product offerings. The fresh round of funding comprises a mix of equity and debt funding. Furlenco raised $15 million in equity from LightBox Ventures, with participation from new investors like Axis Capital and high net worth individuals like Gautham Radhakrishnan, partner at Tata Opportunities Fund, among others. The $15 million funding in the form of debt came from banks such as HDFC Bank Ltd, Kotak Mahindra Bank Ltd and Axis Bank Ltd, apart from venture debt firm IntelleGrow. According to Karimpana, the CEO and founder of Furlenco, the $15 million in equity funding will be invested in operations and expansion and the $15 million in debt funding will be invested in ‘creating assets’, i.e., designing and manufacturing furniture.
About Furlenco: 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. “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 pay off debts. This gives the 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 Rs. 3,000. Furlenco had raised $6 million funding from LightBox Ventures in Series A funding round in March last year.
Our take: India is a populous country where the majority of the population is the working class. People keep shifting their residences depending on their business or employment requirements. Hence, most of the people will not be comfortable with the idea of buying furniture on which they will have to spend a lot to transport and maintain. They would simply prefer to travel light and rent the required furniture when they shift their residences. Companies like Furlenco can prove to be highly useful for this purpose and they can expect to see great growth for themselves. Read more on Startups