Rent 2 Own (Myanmar) Ltd, a motorcycle rental service, has raised $6 million in fresh funding from Germany’s development finance institution Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), and agRIF, an impact-focused fund managed by global impact asset manager Incofin Investment Management.
Daiwa PI Partners, an investment arm of Daiwa Securities Group, is also picking up a stake in Rent 2 Own by buying out an existing shareholder, the company announced on Monday.
Launched in January 2016, Rent 2 Own charges users a monthly fee, which covers maintenance and insurance, to rent a motorcycle. Users can upgrade from an old motorcycle and/or purchase the bike during the duration of the contract.
“We’ve partnered with over 400 motorcycle dealers in the country. We offer their clients a fully insured bike, as well as maintenance, against a monthly fee, and they seem to love it!” said Philippe Lenain, CEO of Rent 2 Own.
“So far the only limitation of Rent 2 Own’s growth has been our limited capacity to access funding,” he said. Lenain has experiences across Asian frontier markets (Cambodia and Vietnam) and has previously led a consumer finance company and a motorcycle hire-purchase firm in Vietnam.
Rent 2 Own expects to use the proceeds from the latest funding for its next phase of expansion.
“In the next five years, Rent 2 Own plans to serve approximately 400,000 active clients,” said a company spokesperson.
Headquartered in Yangon, it claims to have served about 70,000 clients through 34 branches across Myanmar, with coverage spanning Ayeyarwaddy Region to Shan state. It plans to open more than 150 new branches to achieve its five-year target.
Prior to the current funding round, Rent 2 Own had raised a $4 million equity investment from a pool of investors including trusts, boutique investment firms, and a number of small private seed investors.
Rent 2 Own anticipates a strong growth for Myanmar’s motorcycle market over the next few years as witnessed in Vietnam, Thailand and Indonesia in the past decades.
“We’ll be closely monitoring how the legal framework evolves, and we’re ready to move into any new space that would open,” said Tom Holland, a board member of Rent 2 Own.
The investment in Rent 2 Own is the third investment in Myanmar for Daiwa PI Partners after internet service provider Frontiir and travel company Oway.