Inside Furlenco’s Decade Of Turmoil Before The Profitability

For years, Furlenco has been seen as one of the new-age tech platforms built for the long haul. Riding on early momentum, the furniture-rental startup broadened its catalogue, built strong recall across metro cities and scaled like no other. 

Behind the scenes, however, the company stood on the precipice of a near collapse, weighed down by an ever-growing mountain of losses and debt, until it clawed its way back.

Cut to the financial year 2024-25 (FY25), and the company achieved a major milestone, turning profitable for the first time since its inception in 2012. 

It reported a net profit of INR 3.1 Cr in FY25, marking a dramatic turnaround from the INR 130.2 Cr loss in FY24. Operating revenue rocketed 64% year-on-year (YoY) to INR 228.7 Cr in FY25.

But the journey has been long and tiring, to say the least. From mounting losses and debts, layoffs, restructurings and internal pivots to now an IPO on the anvil, has it been worth the drag? 

To understand how Furlenco reached this point, we spoke with founder Ajith Karimpana, who walked us through the company’s journey right from its early days.  

From Wall Street To Bengaluru’s Furniture Markets

Furlenco’s story began in 2011, even before the brand existed. 

At the time, Karimpana, a vice president at Goldman Sachs, was living the ‘American Dream’ and had everything he could dream of.  

Yet, something was missing. While his mind steered towards a stable job, his heart was famished for purpose, fulfilment and something else — something inexplicably satiating. 

With this urge, he began his early rendezvous with the startup world. The stories of several Indian startups taking shape at the time intrigued him, and he couldn’t resist becoming part of the gamble.

A restless Karimpana began toying with ideas, scrapping one after another, until he zeroed in on building an online ticketing platform for India. This became a key catalyst for his flip back to the country. 

He landed in Bengaluru, the city where he began his career in 2000 with Infosys. Still on the payroll of Goldman, Karimpana was scribbling a blueprint of his vision. Many iterations later, he found himself at a cul-de-sac.

“BookMyShow already had captured most theatres. There was no whitespace,” the founder said.

It was time to pivot. A blessing in disguise was that Karimpana’s plan was in the ideation stage, and didn’t cost him an arm and a leg. 

Months passed on the drawing board, but nothing concrete got penned down, until an epiphany dawned upon him when he was at a store buying furniture. He realised just how painful buying and selling furniture could be.

“In the US, I had to sell off my furniture worth $3,000 for only $300,” Karimpana said. The frustration still edged into his voice as he recalled it.

This was precisely when he thought of a furniture rental business, an idea that almost felt borderline absurd to most people back then. 

Deep down, however, Karimpana knew that the gap was real, and only a few small players offered rental furniture, but none had made any attempt to scale it.

Karimpana spent 2011 soaking himself in the furniture ecosystem, understanding inventory, consumer behaviour, and product design. The seeds of Furlenco had been sown amidst suspicions. During this time, he met his early collaborators, a design mentor, and slowly built his first team.

Despite scepticism, he launched RentUrDuniya, a Bengaluru-only rental service that later evolved into Furlenco. 

To kickstart operations, he invested INR 50 Lakh and used a rented apartment as a makeshift showroom.

By the end of 2011, he had two paying customers. “This was it… the validation, and I had it, so I quit my job at Goldman Sachs to focus on Furlenco full-time,” the founder said.

Recalling the early days, he said everything ran on phone calls, deliveries were messy and product mismatches were common. But the toughest part, he added, was that there was no model to follow. 

“We were doing something that nobody had done before. Questions like pricing, warehousing strategy, and refurbishment cycles had no established playbook.”

For the next two years, he kept the company afloat out of his own pocket. And when the going got tough, he approached VCs. But to no avail. Most VCs rejected his pitch, citing slow growth. 

This was the time Karimpana was stuck in a vicious loop. VCs wanted to see scale, but scaling required money, which was a scarce commodity.

This was when his friends helped with small cheques of INR 20- 25 Lakh. In 2014, one friend invested INR 1 Cr, which Karimpana calls ‘serious money’. With this, the founder was able to unlock more categories, a wider delivery radius and early momentum.

By mid-2015, Furlenco secured its first institutional round of $6 Mn from Lightbox. The company was now servicing 100 homes in Bengaluru. 

This fresh flow of funds also helped the company expand to Hyderabad. A year later, it raised another $30 Mn. The company then raised $6 Mn in equity in 2019. This enabled its entry into Delhi NCR, Mumbai, and Kolkata. 

With this expansion, Furlenco’s FY20 revenue touched INR 90 Cr. But behind this growth lurked a structural weakness.

Furlenco’s Debt Trap

The Furlenco model is capital-intensive. It needs substantial upfront capital not only for people, warehouses or expanding geographies but also for furniture procurement. 

By 2020, it had already raised $45 Mn in equity, and the founder did not want to dilute his stake anymore. Therefore, he turned to debt financing, which came at a steep 24% interest.

When the pandemic hit, while the demand for rental furniture remained intact, Furlenco found itself starved for liquidity. 

This is because almost all of its margins were being used to repay debts.

“Despite having raised equity, we barely had a runway of more than 100 days,” Karimpana recalled. By FY21, Furlenco had INR 400 Cr in outstanding debt on a revenue of just INR 84.3 Cr.

“If I were to rebuild Furlenco, I wouldn’t build it on debt. It is my life’s worst decision,” the founder said.

To improve cash flow, Furlenco, in 2021, reorganised itself under an umbrella brand — Furlenco for core rental, Unlmtd for annual subscription, Furbicle for remanufactured furniture, and Prava, a luxury line-up of products.

But the model didn’t work. 

By March 2022, the company had to undertake layoffs and eliminate its Furbicle and Prava verticals. Besides, the company was facing massive backlash on social media due to its poor customer service.

Furlenco’s Turnaround Story

As luck would have it, relief arrived two months later in the form of  Sheela Foam. The parent of Sleepwell acquired a 35% stake in House of Kieraya (Furlenco’s parent) for INR 300 Cr. 

With this money, Karimpana first cleared half of the debt. “After a decade of fire-fighting, I finally slept like a child,” the founder said.

But the war was not won yet. The second priority was to work on unit economics. Over the next few months, Furlenco pushed contribution margins to 65-70% by redesigning its operational backbone. 

This is what the Furlenco founder did:

• Established its own furniture manufacturing plant to control cost and quality.
• Expanding warehouse capacity to reduce delivery times and lower product damage.
• Strengthen refurbishment facilities to cut refurbishment facilities and costs.
• Used AI-driven routing to optimise pickup and delivery efficiency.
• Made automation a core part of inventory management.

In 2024, Sheela Foam invested an additional INR 107 Cr as equity. This further helped the startup grow to 28 cities from 15 cities. The startup’s user base grew from 60K to 1.5 Lakh. It also began selling new furniture, leveraging Sheela Foam’s manufacturing ecosystem.

The partnership unlocked several synergies. Furlenco now gets mattresses and foam at cost price, and its products are showcased across Sheela Foam’s 5,000+ dealer network without any extra capex.

Today, rental furniture accounts for 70% of its revenue, appliances roughly 25%, and new furniture around 5%.

By late 2023, the company had achieved a monthly break-even point, paving the way for a profitable FY25. Now, Furlenco is aiming for INR 370 Cr in revenue and INR 37 Cr in profit in FY26. This roadmap includes new verticals like Furlenco Kids and a premium range for higher-income customers. Looking ahead, Furlenco aims to go public only after FY27. It expects to report a net profit of INR 90-INR 100 Cr by then.

Furlenco’s revival makes for one of the most notable comeback stories in India’s startup space. 

From staring at a near wipe-out to turning profitable for the first time in over a decade, the company has rebuilt itself by tightening costs, redesigning its operations and finding the right strategic partner in Sheela Foam. 

Today, it stands on far firmer ground. But as Furlenco eyes an IPO after FY27, can it convert this hard-fought turnaround into lasting growth?

Edited By Shishir Parasher