With plans to expand to four new cities this year and clocking steady growth, Bengaluru-based GrabOnRent is enabling a shift in consumption patterns and augmenting change from the culture of owning to that of renting.
How often does one resort to solving a pain-point while already having a startup to look after? Not too often, one would guess. But, entrepreneurs always face hardships and challenges in the process of executing their dream and the team that started GrabOnRent had it no differently.
When they were running Perdix, a design consulting firm in Kolkata, and later moved to Bengaluru, the team faced multiple challenges. Buying everything, like furniture for home and workplace, office supplies like laptops and printers, was proving to be too expensive and second-hand goods came with a lot of compromises. Poor quality, unbranded items and no means of restoring.
But, is buying the only way to obtain and use products? Shubham Jain, Co-founder, GrabOnRent thought not. He says, “All of us have been told that the only way of consuming a particular product is by buying it. Businesses have spent decades making buying really easy, and with ecommerce coming in, everything is sorted. We wanted to challenge that and provide an alternative consumption model in which a person can pay per use.”
With that premise began GrabOnRent’s journey in 2015. It is a product rental marketplace that essentially aggregates various suppliers in the market who own brick-and-mortar shops for rentals.
All the four co-founders are graduates from IIT Guwahati.
Growth in recent times
This year, the startup closed a round of $2 million from existing investors Ivy Cap Ventures and Unicorn India Ventures. It had raised its first round of funding of $1 million from the same investors in 2016, and claims to have grown 32X since then.
Vikram Gupta, Founder and Managing Partner, Ivycap Ventures says, “GrabOnRent has a solid foundation of making a profitable business in a unique sector. They display a promise in becoming a behaviour-changing business for the next generation of transient crowd that wishes to stay away from liabilities and lead a commitment-free lifestyle. We support their vision, trust their execution capabilities and wish to see them emerging as a trusted brand in the coming years.”
From serving 2,500 customers in 2016, GrabOnRent now serves around 35,000 customers, with an average ticket size of Rs 1,800 and average number of products being three units. The average rental duration is 12.2 months.
The team size has grown from the initial 15 to 103 at present across four cities. After Bengaluru, it expanded to Hyderabad and, in 2018, to Mumbai and Gurugram. It currently has six categories of items, 500 unique products (stock-keeping units) and is present across four cities in India.
On GrabOnRent’s immediate plans, Shubham notes, “We have deployed about Rs 25 crore worth of assets (under management), which are live in the market, and the plan is to reach Rs 100 crore in the next six months, We are also contribution margin positive and are not burning a lot of money, as rentals is a high-margin game.”
With the ongoing summer, the startup expects a boost in rental of air conditioners and coolers.
For the renting generation
GrabOnRent has tapped into the market brought about by the constantly shifting millennials, who do not put as much onus on putting down roots as the generations before them. Moreover, it saves them a lot of money as well.
On its website, one can rent products as per convenience, be it for an hour or for a day or even for months. Both refurbished and new products are listed on the website. It also has a warehouse/facility centre where all its refurbishing is done in-house.
Through its proprietary software, it is able to manage the entire inventory cycle for suppliers. It also provides them with logistical assistance, thereby helping them cover larger areas, as opposed to their earlier, limited reach.
Grabbing a slice of the rental game
GrabOnRent allows its patrons to rent furniture, electronics, home appliances, office supplies, fitness equipment, among various other things. The founders believe it has, over the years, contributed to changing consumption patterns, helping ease the shift from a culture of owning to that of renting. “The vision with which we go forward is providing accessibility of items to anyone, and as accessibility comes with multiple divisions of items in one’s lifecycle, like education, home, work, travel etc, we would like to cover the entire spectrum and increase reliability and bring about change in the consumption pattern,” Shubham adds.
With bigger players like Rentickle, Furlenco, Rentomojo already in the market, what is it that differentiates GrabOnRent from others? Shubham says, “We are a very horizontal player; we have six different categories of products today and we think our selection also helps. For example, other than the normal furniture category, we had launched an entire category of convertible furniture, which is targeted for places like Delhi and Mumbai, where the real estate prices are high and the houses are comparatively smaller and compact, as one would not be able to enjoy the utility of all the products.”
GrabOnRent has partnered with international players from China and Malaysia for 14 different products of multi-functional and space-saving convertible furniture, rental for which starts at Rs 500 a month.
The startup operates in the rental market size of $3 billion currently and is expected to grow to $25 billion in 2023 at a CAGR of 75 percent.
Shubham says they are plans in place to expand to four new cities in 2018 and they are on track to start operations in Chennai, Pune, Delhi, and Noida. GrabOnRent also plans to add more products like multipurpose and easy storage facilities and home appliances to its product line.