How Bengaluru-based Rentomo is leveraging the power of sharing economyBinjal Shah
In countries like the United States, everything, from a blow dryer to set your hair for a date, the dress to wear on it, the limo to arrive in, or the date himself, can be rented. But in India, people still choke on their pride, even if they spent their lifetime’s savings on a car, only because it is second-hand. But the power of a sharing economy, Anshul Johri feels, is all pervasive, and a newer and more liberal-minded India is starting to see immense utility in it. This is why he set up Rentomo.
In spite of belonging to a middle-class family that placed government jobs at the top of the pecking order, Anshul’s techie aspirations were sufficiently watered. After completing his MCA at University of Pune, Anshul worked for a host of early-stage startups like Ibibo, Asklaila, Bookadda, before he migrated to Amazon, which became his last-ever experience of fulfilling someone else’s dream. “Mainstream jobs are great, as you get good pay cheques, but I found my personal satisfaction missing. I’m always up for donning multiple hats at a time, and entrepreneurship promised innovation, commitment and patience,” he says.
Highly inspired by the Airbnb model while travelling with his wife in Europe,Anshul, 32, realised the potential of sharing economy. The idea to replicate that same model for everything else as well proved to be his Eureka moment.
“I thought of a marketplace model where people have easy and on-demand access to all the items in their neighbourhood. There are a lot of under-used items in each house which people do not wish to throw away or sell as they use it some time. And there are lot of people who are looking for those items for short duration. We just connect them in real time on the platform. People can borrow items from owners, use the stuff and return it back in the same condition. The borrower saves money and, at the same time, the owner makes some. But, trust plays an important role here. So I started thinking of build a tech platform around trust,” Anshul explains.
Privy to the boom in the sharing economy in India, Anshul's initial investigation showed a $9-billion used-goods market in India, and an escalation to approximately a $335-billion reach of sharing economy revenues globally by 2025, from $15 billion in 2015. Currently, there are over 50,000 local rental stores, Facebook pages and groups in India.
With sails set towards Bengaluru for a pilot, the team started with a focus on categories like travel, sport & fitness, and motorbikes & electronics. And use cases showed themselves in a jiffy – like the man who landed in Bengaluru from Delhi and forgot to bring his correct MacBook charger. On the way to his client’s office, he contacted Anshul via Rentomo to borrow his charger for two days. “Within half an hour, the transaction was completed with utmost simplicity and ease,"Anshul says.
But despite their focus on Bengaluru, some successful case studies surfaced in Delhi, Gurgaon, Pune and Lucknow as well. “In Lucknow, a person wanted to hire a wheelchair for two days, which he did successfully through Rentomo. That is the power of social sharing,” Anshul adds.
Rentomo launched the public beta version of its platform in August 2015, which is how it remained for four months till it stabilised. “We recently launched our Android mobile app. We are planning to add payment, delivery and insurance of items soon,” he explains.
Anshul says that since their platform was social and based on trust and networking, they chose Facebook as their first channel to promote the platform. “We get good traction from Facebook - our business page and local groups,” he adds.
A three-pronged revenue model based on commission, referral and traffic is what will keep the cash in the registers flowing. But as of now, Rentomo wants to focus on making people believe in sharing and renting. “Our main objective is to make people realise that sharing is better than owning, and it’s economical,” says Anshul.
To that effect, within five months, the startup has gotten over 2,500 verified registered users, more than 300 listings, and close to over 350 monthly transactions, with an average ticket size of Rs 400. “We have also started B2C partnerships and have on-boarded 30 vendors from Bengaluru as well. We are seeing a 30-per cent month-on-month growth in terms of transaction, users registration and listings. We have a high rate of repeat users, even without much spend on marketing. So far we have grown organically,” Anshul says.
December 2015 brought with it another milestone, as a seed round of $1,00,000 was raised from two angels- UK Bases ex-IIT Shiva Ashok, and another UAE-based investor.
Rentomo's app, developed and launched 10 days ago, has seen about 100 downloads, without any promotion or marketing. Marketing activities are set to start soon.
On challenges and competition, Anshul notes, “There are more new startups coming up in the online rental space, like Rentomojo, Meshapp, Grabonrent etc., but we are into peer-to-peer sharing marketplace, while others are still into inventory-based model. We are investing in building technology behind a network of trust. We have plans to add more products in our top categories, like bicycles, fitness, motor bikes, electronics, and launch insurance of the items.”
As far as rentals in India go, it is an uncharted territory and there is plenty of room for the first set of predictors to capture market share. In the good old days, sans the Internet, peer-to-peer sharing was how renting and borrowing was conducted. The practice was so voraciously lapped up that the market altered itself to become more organised and professional, and started self-regulating to ensure superior quality products were available.
Rental startups should remember these core dynamics and principles of the ecosystem while venturing into the space,which Rentomo claims to do.
Many portals have sprung up offering a specific category of products on rent—like Klozee for clothes, or Rentomojo for furniture—and have successfully raised seed rounds, indicating that the validation for this segment from venture capitalists has arrived.
App link: Google Playstore