TechSparks 2019: Knowledge comes with experience, says Furlenco Founder
At TechSparks 2019, Ajith Mohan Karimpana, Founder of Furlenco, tells the audience how he went from being VP at Goldman Sachs to Furlenco, one of India's first rental startups. He reveals the many challenges, adding that the younger generation is totally on board with the idea of renting.
Renting, as a business model, has been gaining ground in India the last few years. Today, one can rent anything, from clothes to vehicles.
However, renting furniture was unheard of in the country until Furlenco came into the picture. On Day 2 of TechSparks, YourStory’s flagship event, Ajith Mohan Karimpana, Founder and CEO of Furlenco, spoke about his journey into the unknown and all the challenges that came with pioneering this segment.
Back in 2011, Ajith, who was working as a Vice-President at Goldman Sachs, New York, had to move to Bengaluru to head one of the company’s verticals. Among the things to take care of for the relocation was the matter of new furniture. Ajith, who knew nothing about the Indian furniture market, ended up making some bad decisions and buying poor-quality house fittings.
“At that point, I began wondering if furniture could be looked at as a service. I decided to take the plunge, quit my job, and start up. A lot of people around me thought that furniture renting was a bad idea. However, I went against all of them,” Ajith said.
Furlenco, which was initially christened ‘Rent Ur Duniya’, had no support from the ecosystem in the early stages; but, Ajith held on and that paid off.
“Today, Furlenco has come a long way. Every nine minutes, we are helping a household rent furniture. We have managed to raise around $80 million so far and are garnering Rs 100 crore revenue every year,” he added.
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The initial roller-coaster ride
Ajith recounted that his first customer was an expat. To fulfil the order, he sourced a complete set of furniture including a bookshelf, a sofa, and a dining table from a boutique, and stored it in a small shed.
“I didn't even know how to draw up a quotation. Since the service of renting furniture was new, it was challenging for me to even arrive at a price. Besides, another question kept popping into my head: which category of tax should be applied? VAT used to apply to products back then, and service tax was applicable for all services. But, both these taxes were relevant to renting furniture. Since my chartered accountant asked me to go with VAT, I simply followed his advice,” Ajith said.
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Challenges in the rental space
Since renting promises a hassle-free experience as against buying, many individuals are getting on board with it. The younger generation, especially, has bought into the concept, being constantly on the move due to their career and lifestyle choices.
These trends have resulted in a lot of headroom for rental startups in the Indian market. According to a report by PricewaterhouseCoopers, the global rental market will touch $335 billion by 2025. India’s rental industry may be highly fragmented, but it comprises about 10 percent of the global figure.
The rental sector comes with its own challenges, some of which Ajith highlighted during his talk.
“Fundraising is definitely tough, since the business of rental offerings is an asset-heavy one. Besides, it is still at a nascent stage in the country, compared to the US or China. Infusing confidence in stakeholders becomes tricky when the market is unexplored and still evolving,” he said.
Despite these stumbling blocks, the Furlenco Founder said he has been driving the startup’s growth by selling his idea that furniture was a liability and that one should not invest much in it.
Till date, Furlenco has served more than 80,000 customers across Delhi, Bengaluru, Gurugram, Chennai, Mumbai, Noida, Hyderabad, and Pune. It is set to cross the $300 million mark in net subscription revenue by 2023, from the current $25 million.
(Edited by Athirupa Geetha Manichandar)
YourStory's annual extravaganza TechSparks brings together the best and the brightest from the startup ecosystem, corporate world, policymakers and, of course, the investor community. Over the past decade, TechSparks has grown to become India's most loved tech and startup platform for knowledge sharing and networking. A big thank you for all your support over the years and a big shoutout to our sponsors.