As the novel coronavirus crisis paralyzes the Indian startup ecosystem, pushing a majority of the companies in a deep slump, some startups are fortunate enough to get the support that they so desperately need from their existing backers, just in the nick of time.
Online furniture rental and home decor platform Furlenco has landed USD 10 million funding from Lightbox and Saket Burman, director of Indian consumer goods conglomerate Dabur. Burman invested through his personal investment arm Chowdry Associates. Other investors who participated in the round include Kris Gopalakrishnan, former chief executive of Infosys, and Gautham Radhakrishnan, a former partner with private equity firm Tata Capital, and Bollywood actor Aamir Khan.
The overall round for which talks started in November last year, is financed through debt and equity, local media
Founded in 2012 by former Goldman Sachs and Morgan Stanley executive Ajith Mohan Karimpana, Furlenco provides furniture, home decor, and home appliances on rent and has catered to an estimated 110,000 customers across the eight cities. It competes with the likes of Rentomojo, GrabOnRent, CityFurnish, and Voko, among others.
So far, Furlenco has raised an estimated USD 43 million in equity funding, and about USD 45 million in debt financing, the ET report said, adding that the company has paid off about USD 20 million of debt.
Although the Bengaluru-based startup incurs huge infrastructure costs owing to the nature of the business, it runs on a subscription-based model where its customers pay a monthly or annual rent for the items that they borrow. That means it has a recurring income and can sustain itself even without any new business coming in for a while.
“Furlenco is already operationally profitable and this round will further help us progress on our goal of becoming fully profitable in the next 12-18 months,” Karimpana told ET. “While the ongoing COVID-19 pandemic has definitely impacted all of us, Furlenco’s subscription business model with monthly recurring revenue allows us to be a lot more resilient than many of the other startups who are seeing their monthly revenues plummet significantly.”
The investors who KrASIA spoke to said many startups that have a runway of six to 12 months may be able to pass this rough patch better than others. Others are scrambling to see if they can have enough cashflow to go through the crisis, cutting costs wherever necessary and talking to their investors for follow-up rounds.