Furniture rental platform turned losses into profit in October
Rentomojo, a furniture rental platform, has raised 14.5 billion rupees through debt and equity. Of this, 1.3 billion rupees were raised from a group of large institutional participants, while the rest were raised from existing venture capital companies such as Accel and Bain Capital.
Overall, Rentmoho has raised a total of Rs 60 billion in debt and capital so far.
The company claims to be in the black in October and reports annual sales of over 10 billion rupees
Asset acquisition funds
Rentomojo has significantly reduced its losses in the past 1.5 years and turned PAT positive, so there is a lesse“Because we do not have any significant losses right now, the only need left is to purchase assets. This is why we chose to raise a larger debt round instead of equity,” Geetansh Bamania, Founder and CEO of Rentomojo, told BusinessLine.
COVID’s
limited impact
Bamania said: On the other hand, in the
case of Rent Moho, by operating with the revenue of the subscription model, it
is no longer necessary to acquire customers every month. Our exposure was also
very small, usually in the range of £ 15,000- £ 20,000. In addition to this,
the predictable revenues allowed us to significantly reduce costs. “
“We have introduced a lot of
automation and reengineering in terms of financing, reducing the cost of
financing our existing debt. Cumulatively, all of this has significantly
reduced costs. It helped us to go into the black in October, which was also the
main reason we were able to raise a large credit line, “he added.
Rentomojo expanded to eight new cities –
Ahmedabad, Mysore, Jaipur, Faridabad, Ghaziabad, Gandhinagar, Chandigarh and
Calcutta. On average, customers rent from Rentomojo throughout the year, and
about 45% of purchases are made monthly from existing subscribers.
Increasing
demand and limited supply
According to Palmania, there is a huge
demand for leasing in the market. In fact, Rentomojo cannot meet 50% of the
demand from the existing market.
“Demand is not a problem for our
business. The problem is whether we can continuously raise loans and debt
capital from banks, NBFCs, etc. This is very important for us to achieve
profitability. If we make a serious loss, no one will give us huge loans
because we have not recovered The ability of capital. This has led to the company’s
inability to meet market demand. Most of the leasing industry is limited in
supply and can only be resolved through profitability. Therefore, this is an
important milestone for us to achieve profitability,” he added.
Rentomojo plans to raise more capital in
the future to meet its growth forecasts, all in parallel with debt, not just
equity rounds.
Rentomojo competes with players such as
Furlenco, RentOnGo and GrabOnRent in the furniture rental market. r needs to
raise the equity round. Courtesy: www.nextbigbrand.in
