RentoMojo, a Bengaluru startup, is in preparation for its IPO. Started in 2014 by Geetansh Bamania and Ajay Nain, the company lets people rent furniture rather than buy. The business model is still naive in India (except for the big cities, the rest of the country frowns at the concept of furniture renting). However, the company claims to have 2.2 lakh active subscribers. To date, RentoMojo has deployed more than 7.5 lakh products, 65 physical stores across 22 cities in India. Does all this make RentoMojo a good investment option? What are the risks associated? For that, learn more.
How Much Funding Has Rentomojo Raised?
- The company has raised nearly INR 400 crore (approximately $45.3 million) to date.
- These funds have come from some prominent investors like Accel, Chiratae Ventures, and Bain Capital.
Financial Performance of RentoMojo
- In FY24 (April 2023 – March 2024), the company made a profit of INR 22.1 Cr.
- In FY25, the profits grew by 82% – INR 40 Cr.
- EBITDA (a method to measure the operating profit) hiked by 40% year-on-year to INR 92 Cr in FY25.
- Importantly, RentoMojo hasn’t filed any official FY25 financial records yet.
- These encouraging profits and the recent startup IPO boom are the inspiration for the company to get listed by FY27.
IPO (Stock Market Listing) Plans
Recently, RentoMojo has officially started preparing for an IPO to raise more funds to back the company and its plans.
RentoMojo has onboarded IIFL and Motilal Oswal as its book-running lead managers (they will manage IPO paperwork, marketing, and share allocation for the company). The goal is to get listed by FY27 (April 2026 – March 2027).
However, there are two things pending:
- RentoMojo is yet to convert into a “public entity.” Right now, it is operating as a private entity only (and it’s an essential step).
- But before that, the company has to file audited financial statements for FY25 (which the company hasn’t done yet).
Competition & Challenges
The direct competition for RentoMojo is Furlenco, Rentickle, Cityfurnish, etc. The furniture rental industry in India is a new concept and a struggling one because:
- Slow demand (and this demand mostly comes from the big cities) → Indians, except for the real rental furniture that is used in weddings and events, buy furniture (used in homes and offices) from the locals.
- Indians prefer buying furniture on EMI rather than renting. However, since people are constantly traveling from one place to another, this could change.
- High costs → The costs associated with logistics (delivery/pickup), refurbishment (repairing old furniture as they are returned after use), and maintenance will eat into the profits of the company.
- Thin profit margins → Since the business model is complex, the profitability is hard to scale.
One classic example is the Furlenco’s performance in FY24:
The company has been in business for years (since 2012), yet it is struggling financially. Its profits fell 10% from INR 155.8 Cr in FY23 to INR 140 Cr in FY24.
The company suffered these losses because of the risky nature of the rental furniture industry. Risks like:
- Refurbishment Costs
- Operational Expenses
If the company ever gets listed, it could be a good option for risk-takers.
Leave a Reply