Furniture and consumer durables rental start-up RentoMojo has raised $10 million in series B funding from private equity investor Bain Capital Ventures and fintech entrepreneur Renaud Laplanche, the company said on Tuesday.
Existing investors Accel Partners and IDG Ventures contributed 20-30% of the fund and have increased their share in the firm, RentoMojo chief executive Geetansh Bamania said. Accel Partners and IDG Ventures had earlier invested $7 million over two rounds.
“Bain coming in at this stage and Renaud’s faith in us is a big confidence booster. I think people will now move from seeing us an e-commerce company to a fin-tech consumer leasing firm,” Bamania said in a telephone interview.
RentoMojo has brought on board Laplanche, who founded peer-to-peer lending start-up Lending Club and led the US firm to its initial public offering in 2014. He joins the board at RentoMojo along with Bain Capital managing director Salil Deshpande.
RentoMojo, founded in 2014, offers home durables from sofas to appliances like washing machines and even two-wheelers on rent. The service is pitched as an alternative to buying home durables.
“RentoMojo is going after a potentially very large market and has demonstrated impeccable execution so far. We are very happy to be part of the company’s journey and continue to remain excited about its future potential” said Venkatesh Peddi, executive director at IDG Ventures.
Since its launch, Bengaluru-headquartered RentoMojo has grown to eight cities, including Delhi, Pune and Mumbai, with about Rs45-50 crore worth of products already handed out on rent. Bamania said the company leases about 16,000-20,000 items every month and has over 25,000 active customers currently.
The fresh capital will provide much-needed scale to its leasing programme, Bamania said. RentoMojo will use 20-30% of the fund towards marketing and branding. The rest will be invested across lateral hiring and increasing its products catalogue.
“In India’s credit-constrained economy, RentoMojo has built a defensible beachhead in multiple categories in an underserved sector in the subscription economy, with a capital-efficient two-sided marketplace, no balance-sheet risk and network effects at scale,” Bain Capital’s Deshpande said in a statement.
RentoMojo has an asset light model where it raises external capital from banks and financial institutions to buy products, which are then leased out to customers for a minimum of three months to up to two years.
Bamania said RentoMojo will start a three-year lease programme, launch new categories and look to go deeper in existing geographies going forward.
This article was first published on Livemint.com