Furlenco redefining the furniture rental space in India
Coming from an Investment Banking technology background, Ajith Karimpana left his plush job as Vice President from Goldman Sachs in October 2011 to walk down the entrepreneurial path. While moving back from US to Bengaluru, Karimpana had to sell his $5,000 worth of furniture for little over $300 on a fire sale. That’s when he first experienced the perils of relocation – having to sell furniture. But to his dismay, he had to once again go through the harrowing experience of buying furniture from local vendors in Bengaluru. This is exactly when it became clear to him that there is an opportunity to introduce the ‘rental furniture’ concept to India. As a result, Rent Ur Duniya was born (later rebranded to Furlenco) in 2012.
Furlenco, owned and operated by Bangalore-based Kieraya Furnishing Solutions, is a first-of-its-kind home furniture rental start-up offering easy and affordable solutions to the anticipated furniture rental needs of a variety of clients – ranging from expats to students, and from professionals to Business to Business to Consumer (B2B2C) companies.
Furlenco was set up with an initial capital of Rs 50 lakh from the promoter and his friends and family. The funding was used to set up company operations and capital expenditure. Later, Karimpana realised that he would need external funds to finance his working capital requirement, since the venture was growing faster than anticipated. Karimpana made efforts to crowdsource funds through various online dealmaking platforms like LetsVenture, but later went on to raise debt funds from CapitalFloat in smaller amounts.
How it works?
Furlenco designs, manufactures and holds its own inventory and rent them out to customers, who pay a monthly subscription fee. The firm is growing at a healthy rate of 50 per cent month-on-month. At present, the start-up has over subscribed over 1300 houses.
Karimpana confirms that on an average customers take at least 1 BHK package from Furlenco – which works out to be around Rs 5,000/month; Rs 6,000 for 2 BHK and Rs 7,500 for 3 BHK apartments per month. The products on offer are a mix of fresh and refurbished goods. Besides furniture, it also offers home appliances. However, these are not available as standalone products, but are included in the packages.
Furlenco offers various other range of flexible room based or full home packages. For a living room package; which consists of plush couch, center table, floor lamp, tealight holder and soft furnishings; the monthly rentals start from Rs 2,000. A Bedroom package; which includes a queen size bed & mattress, single bedside table, table lamp & photo frame and soft furnishings; are offered at Rs 1,500/month.
In order to take care of the wear and tear occurred during the rental period by the customer, the company also offers a damage waiver. It does not charge the customer if the damage amount is restricted to Rs 10,000. If the damage exceeds that amount then it asks the customer to pay up. Moreover, they provide free relocation and furniture maintenance service once in 12 months.
The start-up currently operates in Bangalore and has plans to expand to one more city by the year end. Its total employee strength is 40, which it plans to expand to 100 by December.
Furniture is an essential component of that most basic need – shelter. It is the third most expensive purchase that anyone makes (preceded by a house and a car – both of which have financing options). How your home is furnished is taken as an indicator of the type of person you are. It is a reflection of a personality and self worth.
There are around 80,000 professionals who graduate from 90 universities in over 50 cities and then relocate to various cities for a job. These professionals are moving into a world of extreme uncertainty. They are leaving their homes and going to a new city for an undefined period of time. Furlenco is trying to address the gap of buying/renting and selling/reselling the furniture. It makes returning the furniture as easy as a click.
The furniture market is currently made up of 10,000 small furniture manufacturers distributed all over the country. While carpenters can build a sofa or bed, it typically takes them around 3-4 weeks to deliver the same. Furlenco aims to change this equation by building modular furniture in a state-of-the-art facility.
In an interaction with Entrepreneur India, Ajith Karimpana, Founder & CEO, Furlenco, shares the challenges faced initially, future roadmap and how he strives to make a difference in furniture rental space in India:
What was the reason behind rebranding Rent Ur Duniya to Furlenco?
We needed a name which embodies our vision to be the leader in the shared economy space. Furlenco does that well.
What challenges did you face initially and how did you overcome them?
The biggest challenge was people’s perception about rental furniture. They think it is “used” furniture. We overcame that issue by our brand promise that if you don’t receive “like-new” showroom quality furniture, you can reject the items. This worked. Now, some of our customers actually take pride in showing our furniture which we take as a compliment.
Give us an overview about the current state of furniture rental space in India and how do you strive to make a difference in this space? What pain points are you trying to address?
The current furniture rental market is mainly small family businesses, who have graduated from being tenthouses and shamianas to now furniture renting. The quality and standard are far from creating a want for customers in this space. Furlenco is creating a new category here.
Now more so than ever, Indians are constantly on the move. An average urban Indian moves at least once in 3 years. As part of this move, they sell/dump their old furniture and buy newer furniture. Because furniture is a highly depreciating item and at the same time very expensive for first purchase, people end up spending so much that they don’t realize that it is actually cheaper (by up to 25 per cent) to rent all along.
The other pain point we are solving is the “want” for great furniture. People want to experience quality solid wood products, which they don’t buy because of the cost and uncertainty in their lives. Furlenco provides customers with option of having a different furniture experience every year. Never has been this done before in India.
Access over ownership is our philosophy.
What makes you to stand apart from other players in this space?
Put simply, the value proposition of “no commitments”. To be able to get access to quality furniture for a fraction of the price of buying is a proposition which makes us stand apart.
Given the fact that most of the investors shy away from investing in non-tech startups initially, did you, at any point of time, personally faced any issues related to the same? What would you advice/suggest to a non-techpreneur loking to raise external funds?
Yes, it took us a while to convince investors. However, it has less to do with tech/non-tech. What really matters is traction and market adoption. If that is there, tech can always provide the scalability. I would advise non-tech entrepreneurs to work on creating the market and traction.
After eCommerce, its mCommerce, what's your take on using mobile as a strategy to drive business?
Absolutely! 70 per cent of our traffic is coming from mobile. I think mobile is the way to go.
eCommerce firms are going offline these days to deliver seamless customer experience, do you, in near future, plan to launch offline stores as well?
While there are no immediate plans to go offline, we would be open to the idea.
Managing efficient supply chain/logistics is of utmost importance for eCommerce firms. How do you go about managing the logistics and reverse logistics process involved?
The last mile logistics are completely controlled by us. We believe in giving the most awesome customer experience possible and in our business that can happen only if we control the last time. We have trucks attached to us along with trained delivery boys, who are accompanied by smart customer relationship managers managing the entire last-mile delivery.