Furlenco hopes to re-arrange online furniture market

With large number of people migrating within the country, the demand for renting out furniture has gone up among people who find it more economical than buying SHUTTERSTOCK.COM

Looking to raise around ₹300 crore, via both debt and equity, over the next few months

Mumbai, July 5

Online furniture rental company Furlenco is looking to raise around ₹300 crore, via both debt and equity, over the next few months to take on vertical players such as Urban Ladder and Pepperfry.

The company is also looking at expanding to more cities with new product lines, and is already in talks with a few banks and PEs for the same.

Furlenco, founded in 2012, had received a $6-million funding from Lightbox Ventures last year.

It currently provides services in Bengaluru, Mumbai and Pune and plans to enter Delhi-NCR by the year-end.

The Bengaluru-based company will soon be launching hi-tech sleeping pods, multi-functional bed-cum-sofa-storage, a range of kids utility furniture and a gamifying dining table, which can be turned into a poker or billiards table.

The company says that it wants to disrupt the furniture market the way Uber disrupted the taxi segment, Airbnb disrupted hotels and Netflix disrupted the entertainment industry, through the shared-economy concept.

Ajith Karimpana, founder, Furlenco says: “In the next five years, the whole of urban India will be renting out products and services. It has already started to happen in the housing and auto segments. Furniture has started witnessing disruption.”

Consumption patterns

Karimpana, who started Furlenco after having to deal with the pain of shifting houses and buying and reselling furniture, said that the consumption patterns of Indian consumers are changing rapidly and that they don’t want to buy products whose value is fast depreciating.

He further added that people want to change their decor every one or two years and hence tend to spend more; renting will not only save them a lot of money but also provide them the flexibility of swapping furniture whenever they want.

With large number of people migrating within the country, the demand for renting out furniture has gone up among people who find it more economical than buying, Karimpana said.

The company has furnished about 5,000 houses and targets 25,000 households by March next year. It company plans to be EBITDA positive by April 2017.

Furlenco claims that it is making money on 90 per cent of its transactions and has grown 20 times in two cities — Mumbai and Bengaluru.

Unit economics

Karimpana says that given the nature of the business, which is quite asset heavy, the company, from the very beginning, has focused on unit economics. It has kept its burn rate, too, low at ₹1 crore a month, compared with ₹6-7 crore by UrbanLadder and Pepperfry, according to sources.

The company is already targeting ₹25 crore revenue this year.

It has created a disruption in the online furniture space, forcing vertical players to start selling products on EMI basis.

Published on July 05, 2016

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