Rentomojo Took Almost A Decade To Find Its Mojo; What’s Next?

The great Indian new-age tech IPO queue is growing as we speak, and the newest entrant to add gravity to this frenzy is RentoMojo — a Bengaluru-based furniture and appliance rental platform. 

Incorporated in 2014, the company has reportedly appointed Motilal Oswal as one of its book-running lead managers (BRLMs), marking its first step towards the D-Street. Although the startup hasn’t given a definitive timeline, there is an unspoken code among Indian startups for going public within 18 months of hiring investment bankers.

If everything falls into place, Rentomojo is set to become India’s first rental-focussed startup to shine on the bourses. But, there is something else that makes Rentomojo particularly interesting among startups planning to list on the exchanges. Well, the company has been in the black since the financial year 2022-23 (FY23). 

It posted a net profit of INR 6 Cr against a revenue of INR 121 Cr in FY23. On the profitability scale, the company rose from a loss of INR 14 Cr and a revenue of INR 105 Cr.

Rentomojo posted a PAT of INR 22 Cr in FY24 and raked in revenues of INR 193 Cr. The company posted a net profit of INR 40 Cr (unaudited) in FY25 against a revenue of INR 270 Cr.

From navigating the challenges of the subscription economy to building a sustainable business model in a capital-intensive sector, Rentomojo’s path has been anything but smooth. And with the company aiming to go public by mid next year, we couldn’t resist asking its founder, Geetansh Bamania, to share his journey so far.  

Pain Pangs That Led To Rentomojo

The idea for Rentomojo emerged from Bamania’s own experience of how crucial it is for bachelors to stay asset-light. 

Bamania’s story unfolds something like this: After graduating from IIT Madras, he worked with KPMG for six months and then with Flipkart for a year in Bengaluru. His stint at Flipkart inspired him to create an online skill exchange marketplace. The marketplace business failed to take off, forcing Bamania to take a once again. His stars landed him in Delhi and then Mumbai after a year.  

“After staying in Delhi for not more than six months, I moved to Mumbai in search of greener pastures and joined Pepperfry in 2014,” Bamania said.

The relocation costs (Bengaluru-Delhi-Mumbai) hit him hard. The founder said that he was almost broke at the time. With just a salary to survive in a city like Mumbai, he took a loan to get his rented house in order, literally — buying appliances, furniture, even a bed and mattress.

He gradually started realising that nomads like him, who frequently move cities for work or education, ownership becomes a burden. His stint at Pepperfry as head of private labels reinforced this belief. 

“I observed that there are many urban consumers just like me, who change homes within months after buying anything new, furniture or appliances. I saw a clear gap here to provide flexible, rental home solutions,” Bamania said, adding that the idea of Rentomojo had already been born.

In late 2014, Bamania teamed up with his IIT Madras batchmate Ajay Nain to launch Rentomojo. They officially started operations by mid-2015. 

From raising capital to acquire assets (furniture) to creating market awareness, the early days were the most challenging, to say the least. 

“We were like Airbnb, convincing landlords to share homes and travellers to skip hotels,” Bamania said. 

With banks reluctant to fund asset-heavy models, the startup turned to NBFCs. But it was not until early 2020 that Rentomojo saw a glimpse of profits.

After posting profits for four consecutive months, it was now time to scale categories and expand geographies. However, destiny had something else in store. 

From The Pandemic Survival To Sustainable Growth

When the pandemic-induced lockdowns hit the country in 2020, Rentomojo had little choice but to recalibrate its operations and conserve cash. 

In the first year of the pandemic, the startup adopted aggressive cost-cutting measures, reducing marketing spends, rationalising employee costs, and prioritising subscribers over new customer acquisition. 

The startup’s total expenditure stood at INR 182 Cr in FY21, representing a 21% decline from the year-ago fiscal year. Total expenses further fell to INR 119 Cr in FY22, helping the company reduce its loss from INR 75 Cr in FY21 to INR 14 Cr.

What helped the founder reduce their losses was their decision to exit non-core bets, such as bike rentals, to double down on the mainstay categories. 

According to Bamania, one of the key perks of being a consumer SaaS company is revenue predictability. “Being a subscription-based startup, we had visibility into our next two years of revenue. Customers don’t just wake up one day and walk away,” Bamania said. 

For context, Rentomojo’s average customer tenure is around 18 months. 

Moving on, as the world adapted to the new normal of working from home, the startup saw an uptick in demand for products that assisted a large population of the corporate workforce — think workstations, ergonomic chairs, etc.

Meanwhile, to get more clarity about the customer predictability cycle, Rentomojo leaned on automation and technology to enhance efficiency across its various touchpoints. The startup’s tech team developed an in-house risk assessment software to evaluate a customer’s return potential, and an enterprise resource planning (ERP) system to track every product, from warehouse storage to refurbishment and delivery. 

These innovations reduced losses emerging from defaults, cut logistics and refurbishment costs, and lifted contribution margins above 60%. 

Strategically, the startup exited capital-heavy, low-demand areas to focus on core essentials – beds, wardrobes, refrigerators, and air conditioners, where demand remains consistent and replacement cycles are predictable. 

By FY23, the results were visible. Operating revenue rose 15% to INR 121 Cr, while expenses fell to INR 117 Cr. This led to a profit of INR 6 Cr. 

 

Rentomojo’s Omnichannel Play

After turning profitable, Rentomojo pressed its foot on the expansion pedal last year. It diversified its offering and strengthened its physical footprint. 

In the last couple of years, Rentomojo has expanded into newer segments, such as baby care and medical care, a move aimed at increasing wallet share among its urban consumers. 

However, the most notable push has been its offline foray. From launching its first retail outlet in 2022, the startup now operates 65 stores, most of which were added in the last year alone. 

The rationale: furniture and appliances are high-touch categories where customers prefer to see and feel the product before committing. 

“Offline has helped become an additional top funnel for us. It now contributes nearly 18-20% of Rentomojo’s operating revenue,” Banamia added. 

Rentomojo is now present in 13 new cities, including Ahmedabad, Jaipur, Mysuru, Chandigarh, and Kochi. At the same time, the startup launched Limitless, a bundling initiative designed to raise average revenue per user (ARPU) by offering curated product packages within set price brackets. Currently, its ARPU ranges between INR 1,500 and INR 2,000. 

All of these expansions have been funded by INR 400 Cr worth of equity funding that the company has raised so far from investors such as Chiratae Ventures, Accel Partners, and Bain Capital.  

 

Together, these initiatives have pushed Rentomojo’s operating revenue to around INR 270 Cr, up 40% YoY, with profits expected to nearly double to INR 40 Cr in FY25, driven by a growing subscriber base of over 2.2 Lakh users. 

Rentomojo Sets IPO Sail Amid Tough Waters

As Rentomojo looks to the future, its roadmap is focused on three key priorities — expanding into more cities, adding new product categories to lift ARPU and wallet share, and ramping up procurement of furniture and appliances to cater to a growing subscriber base. 

However, how effectively the startup executes these strategies will determine its long-term sustainability, especially as it prepares for a potential public listing.

Even as the startup broadens its geographical footprint, revenue concentration in metro cities like Bengaluru, Delhi, Mumbai, and Hyderabad remains high. These urban centres continue to drive the bulk of Rentomojo’s earnings, aligning with its core demographic of young professionals who frequently relocate for jobs or education. 

However, scaling beyond these metros, into tier II and tier III cities, poses a fundamental challenge. This is largely because renting furniture or appliances remains a relatively unfamiliar concept in these regions. 

Additionally, the economics of renting are becoming less attractive for a segment of consumers. The availability of no-cost EMIs, extended warranties, and deep ecommerce discounts has blurred the line between renting and owning, eroding one of Rentomojo’s key value advantages. Industry trends reflect this strain — rival Furlenco saw its FY24 revenue decline 10% to INR 140 Cr. 

Amid this, setting up stores in premium neighbourhoods and marketing in tier II cities are capital-intensive bets that could weigh on profitability in the short term. While that may not bode well for the company, another emerging concern for Rentomojo is user experience. Social media is rife with complaints over delivery delays and product returns. 

While Bamania has addressed these issues publicly, the risk is that even a single experience gone awry could permanently drive a customer away, especially in a subscription-driven business.

As Rentomojo prepares for its D-Street voyage, it is expected to undergo intense investor scrutiny. Public investors will watch closely to see if the startup can grow revenues sustainably in a challenging market, which is also the next test for Rentomojo — to convert operational efficiency into long-term growth. So, can the furniture rental startup prove that India’s furniture rental economy is ready for the public markets?

Edited By Shishir Parasher