Bengaluru-based online furniture rental platform recently raised $140 million as a mixture of debt and equity, shares Ajith Mohan Karimpana, Founder and CEO, Furlenco.
He adds that most of the funds will be utilised to build assets. Apart from that, the fundraise is going to be used for the growth of marketing, investment, and technology.
Additionally, the brand also aims to move into newer cities. As of now, the brand is in 11 cities in India and aims to move to 20 cities within the next couple of years. Furlenco also aims to expand into newer different categories.
“Fundraise is always a milestone, but it is a stepping stone towards what we were always doing, it is actually a fuel for the next phase of growth that we were planning,” says Ajith.
Ajith Mohan Karimpanna, CEO, Furlenco
According to Ajith, the company has a revenue target of Rs 2,000 crore over the next five years, with the subscription business contributing a larger chunk. Apart from that, Furlenco is planning to double down on the sustainable category space.
Ajith says that in June, Furlenco recorded its highest sales ever, and expects July to be much better. With the recent fundraise, the company is expecting a much larger growth in the future.
The lockdown affected Furlenco as they couldn’t pick up and deliver furniture, shares Ajith. However, as the company is in the subscription business, they didn’t have to keep acquiring customers constantly to keep the revenue intact because the rent kept coming in despite the lockdown. He adds that Furlenco was operationally profitable during the pandemic.
“We would have loved to grow but growth was prohibited by the lockdown because we couldn’t get newer customers to come on board. However, we didn’t lose any customers as well,” says Ajith.
The pandemic has underscored the importance of being asset-light amid uncertainty. With people returning from their hometowns to work in different cities, Ajith says they are thinking of renting things instead of buying them.
“Things are better now and people have realised that this is the way to be living. It’s starting to become a way of life,” says Ajith.
Ajith says that more than 40-50 percent of Furlenco’s assets are off the books, so the company is already 50 percent asset-light, making it sustainable in the long run
He shares that while they expect to expand in the home lifestyle category, the company is sticking to what people usually rent such as furniture and appliances.
“This is the beginning of subscription commerce. I think 2020-2030 is going to be the decade for subscription commerce,” says Ajith.
Ajith concludes by saying that as of now, the funding is sufficient for the next couple of years. However, the company has plans to raise more equity money in the future.
