More For Less
Why buy when you can rent! Startup RentoMojo offers a range of products for your house for a piddly amount
My parents knew of only two career options — medicine and engineering. I chose the latter,” says IIT-Madras graduate Geetansh Bamania, who founded one of India’s fastest growing startups RentoMojo. “Engineering has helped me understand lifestyle maths, something that is key to my business,” adds Bamania.
The online company that rents out home appliances, furniture and living accessories for a subscription — a model that is fast growing in e-commerce — was started with a small seed capital from Bamania’s brother in 2014. With the growing interest among investors and consumers in the sharing economy, RentoMojo soon picked up business. Between 2015 and 2016, it raised $7 million from IDG Ventures and Accel Partners in two tranches. The fund will be mainly used for expansion and creating more awareness among target consumers — working professionals in the age bracket of 20 to 35.
“Ultimately, the aim is to maximise our scale of operation by expanding categories and locations and finally taking the business to a much broader subscription-based model,” says Bamania, who has been selected by the jury for the BW Businessworld Young Entrepreneur Award-2016.
Bangalore-based RentoMojo, already present in three other cities including Delhi, Mumbai and Pune, plans to go to Chennai, Hyderabad, and more cities in the South. It also plans to add new categories including transport.
How It Works
RentoMojo operates on an asset-light model. It works with financiers who pay for the assets and it shares a portion of the rent with them. This way, the capex is fully converted into an opex model, which makes it a scalable venture in the startup world.
Consumers like it because it offers an affordable range of products. “The economy of affordability for our class of customer is far superior in this model,” says Bamania, adding that it makes more sense for a bachelor, who is staying in a city for only a few months, to pay a rent of Rs 500 per month for a wardrobe instead of buying one for Rs 10,000. “The rent costs him less than the price of the furniture. Plus, he doesn’t have to go through the trouble of carrying it along with him or finding a buyer when he moves to another city,” says Bamania.
RentoMojo, which is promoting ‘lifestyle on a rent’ concept among the growing mobile population in cities, claims to have 15,000 active consumers online, with every subscriber, paying an average of Rs 7,000 to Rs 8,000 per month. It wants to touch at least one million subscribers by the next 12 to 18 months.
While there’s growing demand in markets, to achieve a greater scale of operation, a wider network and broader range of product categories are vital for RentoMojo. The company is already working on these aspects as well as its margins, which must be set right to adjust cost fluctuations. Any disruption to these basic fundamentals, from internal elements or market forces can prove detrimental to the venture.
Bamania and his team are well-aware of the threats, but are unperturbed. He says,“Hire the best in terms of integrity, energy and intelligence. Always keep the base margin higher, and be alert on disruptive technologies.”
At this moment, RentoMojo is a clear market leader in this space with no parallels in the market.
[email protected]; @unni_CH