In one of the startup’s early days Rentomojo’s CEO Geetansh Bamania was out doing door-to-door sales of furniture while his parents waited patiently at his home to wish him on his birthday.
Hustle was the mantra for the online furniture and appliance rental startup from the beginning. In another instance, a corporate B2B customer once returned 300 bean bags due to a lack of space at his warehouse, and the Rentomojo team had to sell all of them in a day. They went around Powai in Mumbai and knocked on virtually every door to sell them off to youngsters.
Indeed, Founder Geetansh sold the products himself to the first 80 users of the company.
Today, Rentomojo is clocking more than one lakh live orders a month, and the team is aiming to up that number by 10x in the next 2.5 years. The platform offers home furniture, electronic appliances and automobiles on lease in cities like Mumbai, Delhi, Pune, Bengaluru, Chennai, Hyderabad, Noida, and Gurugram.
The startup claims to have almost tripled its revenue in FY19 with Rs 110 crore as compared to Rs 37 crore in FY18. Considering that it made a revenue of Rs 15 crore in FY17, the startup has grown its revenue by 7x only in the last two years.
Speaking to YourStory, Geetansh explained how the startup reinvents itself constantly to remain relevant at all times.
"We do periodic focus group discussions with our customers. This has been a great source of new ideas as well as inspiration for the entire team."
He adds that Rentomojo has been unit economics-positive since inception, and is on track to turn EBITDA-profitable in FY21.
In an earlier conversation, he had told YourStory about the model that has helped the startup find success:
"From a rental model, we started adopting an EMI one. Prices keep dropping as the (rental) tenure increases. There are many consumer lending companies that are trying to solve the credit constraint in the retail commerce space, but there aren’t many consumer leasing platforms. In that sense, we have kept the doors open to create leasing (options) for many kinds of products."
When it comes to the B2C segment, a user can pick up any piece of furniture or product from a physical retail store or an ecommerce platform for a certain EMI. In the leasing model, this EMI is converted into a rent that is paid out over a certain period of time on a monthly basis, while the minimum tenure is in between three months and three years.
The startup leases the products by working closely with NBFCs, financial institutions and high net-worth individuals (HNIs) to finance the purchase of the furniture, bikes and appliances, and then rents them out to the consumer.
So if it picks up a four-seater sofa set that costs Rs 1 lakh (plus interest that the bank or NBFC charges), it leases it out to a consumer for a slightly higher amount to cover the interest and its own margins.
The focus of Rentomojo in the furniture and appliances category has always been to offer relevant products to its users that solve their utility needs, especially while moving to a new city or accommodation rather frequently.
The CEO says, "We are quite nimble in identifying and launching new categories and products that our customers want from us. We listen to our customers intently and change our pricing structures, design and selection. We also see ourselves as a solution rather than a destination, which allows us to establish tie-ups with other retail networks online and offline."
How to crack the market 101
The startup had its fair share of challenges while having to select the furniture, manage the inventory and asset financing, which it was able to solve by using technology and valuable partnerships.
The first few users of Rentomojo came through references and word-of-mouth as when it is about renting something like furniture, quality of the products and ease to use become important.
Today, the startup has multiple channels for user acquisition, both online and offline, with word-of-mouth still being the most important one.
"Our target market is young professionals forming part of the Gen-Z and millennial generations who spend considerable amount of time online. So, our marketing efforts have largely been targeted towards social media like Facebook, Instagram, and YouTube. Along with this, we focus on Google Ads, brand collaborations and channels of extensive interest of the target generation."
But what helps Rentomojo reach its customers at the right time is that it has a strong tie-up with offline brokers. Geentansh says the startup is also present in offline stores of large retail networks and online retail websites.
The startup raised a total of $32 million in funding over three rounds. The latest round of funding was closed in May 2019 for a total of $15 million with existing investors like Accel, Chiratae Ventures, Bain Capital, and new ones like Samsung, Mitsui, and GMO.
"We have been fortunate to have our core investors (Accel Partners and Chiratae) with us since our pre-Series A round. Their continued support in terms of business insights, valued experience in the industry has been instrumental in driving the growth and help us reach the stage we are."
(Edited by Evelyn Ratnakumar)