Bengaluru-based furniture rental company Furlenco has raised $140 Mn in a new funding round, that is largely made up of venture debt with a minor equity portion. The Series D round, which was led by Zinnia Global Fund, CE-Ventures and Lightbox Ventures, saw $120 Mn in venture debt with the rest being equity funding.
After a rollercoaster year for most consumer-facing rental services, where operations were halted for several months, Furlenco will be looking to utilise the funding to scale up its operations in India and explore international market expansion, including the Middle East. According to the company, in the past year, growth and revenue has been sustained to a large extent due to the addition of new categories such as electronics on its rental platform.
The funds will also be used to add new designs, support growth initiatives such as marketing and advertising to meet the annual revenue rate target of $300 Mn in the next five years. The latest round follows an INR 53 Cr debt financing round from November 2020, which saw investments from Rangoli Resorts, Beeline Impex, Aditya Burman and Crescent Enterprises.
Founded in 2012 by Ajith Mohan Karimpana, the online subscription-based furniture rental platform currently operates in Bengaluru, Delhi/NCR, Hyderabad, Chennai, Mumbai, and Pune. Since inception, the platform has claimed to serve over 110K customers. Last year the founder and CEO had said that the company is already operationally profitable and it aims to become fully profitable in the next 12-18 months.
While most companies had employees working from home till now, the end of the second wave has seen many offices reopen. As employees move back to their Pre-Covid lifestyle, furniture rental may once again see rapid adoption in major metros.
In the furniture rental space, Furlenco primarily competes with Rentomojo and Rentickle, besides the many local furniture and appliance rental retailers. In the furniture category, the entry of IKEA has increased the competition since IKEA tends to compete on aggressive pricing, ever-changing designs and has massive brand recall too.
Among other platforms, Urban Ladder was acquired by Reliance Retail last year in a distress sale, while Pepperfry is preparing for a public listing and a wider omnichannel play.
“Lifestyles have evolved and so have the needs of the urban Indian when it comes to how they do up their home. However, the furniture industry has some catching up to do in providing the right kind of solutions. We know there is immense strength and scope of innovation in the B2C commerce space and the sectors we operate in. We are tapping into that potential and will definitely disrupt the market with what we are planning,” said Karimpana.