Furniture subscription company Furlenco raised $140 million in a mix of debt and equity rounds led by Zinnia Global Fund. Existing investors CE-Ventures and Lightbox Ventures also participated in the Series D round. Furlenco has raised debt rounds at regular intervals, but its last equity funding came in November 2019 after CE-Ventures led a $17.5 million round in the furniture rental startup.
The fresh funding will drive the startup’s reach to larger audiences and support the Bengaluru-based company’s new launches in more Tier I and Tier-II cities. Furlenco has received around $240 million across equity and debt rounds, with the latest round to date. In January 2021, the Amir Khan-backed startup raised INR 44 crore in debt round from Black Soil Capital and Crescent Enterprises Limited.
Pandemic driving the furniture rental space
The ambiguity posed by the pandemic is driving people to save and cut down on unnecessary expenses. Millennial consumers are increasingly looking for affordable alternatives and are open to renting. Furlenco said that it had witnessed an increase in its user base, translating into a 20-30 percent rise in monthly sales.
Ajith Karimpana, Founder and Chief Executive Officer, Furlenco, said, “The support we received through this funding round will allow us to continue the growth journey Furlenco has embarked on since its founding. We are growing at a CAGR of 130 percent and will cross the USD 300 million mark in net subscription revenue by 2023. Our in-house designed, award-winning furniture offerings are inspired by the evolving lifestyle needs of urban professionals.”
“We see strong business opportunities in the Middle Eastern market, especially in the UAE, where the predominantly urban and young population values quality offerings with convenience. By leveraging CE-Ventures’ strategic expertise and in-depth market experience, we are well-positioned for expansion,” Ajith added.
The Bengaluru-based company said that it could reserve 95 percent of its revenue in FY21 and is looking at scaling its annual revenue to $300 million in the next five years. In the financial year ending on March 31, 2020, the furniture rental platform increased its income from operations by nearly 42.60 percent to INR 90 compared to INR 63.08 crores in FY19. The company’s total spending went up by around 20 percent during the year, from INR 144.7 crore in FY19 to INR 174 crore in FY20.
Tushar Singhvi, Director of CE-Ventures, said, “Globally, the sharing economy is projected to generate roughly USD 335 billion in revenue across key sectors by 2025. India’s forecast of rapid urban expansion and the growing influence of the country’s millennial workforce closely mirrors the changing face of the MENA region.”
“There is no doubt about the vast global opportunity for innovative offerings such as Furlenco’s subscription service for furniture and appliances. We look forward to working closely with the Furlenco team, supporting their mission and expansion plans in the MENA region,” he added.