Bengaluru-based furniture and appliance rental platform Rentomojo is positioning itself for an initial public offering (IPO) within the next 18 months. This move comes as the company has demonstrated a robust financial recovery and achieved sustained profitability. Rentomojo plans to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) by 2025.
Turning Around from Adversity
Founded in 2014 by Geetansh Bamania, Achal Mittal, Ajay Nain, and Gautam Adukia, Rentomojo operates an online subscription model that allows customers to lease furniture and home appliances. The company serves 16 cities across India and has reportedly catered to nearly 450,000 customers since its inception.
The journey to profitability has not been without its challenges. As the COVID-19 pandemic struck, Rentomojo faced significant financial hurdles, with reports indicating that by December 2020, the firm had only a 15–20-day cash runway. This situation prompted immediate cost-cutting measures, including salary reductions and layoffs. The crisis led management to pivot away from reliance on external capital, emphasizing a more disciplined approach to operations and sustainable growth.
Financial Performance and Market Position
The company’s turnaround was evident in its fiscal year 2024 (FY24) performance, where Rentomojo reported revenue of INR 195.8 crore, reflecting a 59% increase from FY23. Additionally, the company achieved a net profit of INR 22.1 crore, a significant rise from INR 6.2 crore the previous year.
In contrast, major competitor Furlenco reported a widening loss of INR 130.2 crore and a decline in revenue to INR 151.9 crore in FY24, underscoring Rentomojo’s strong position in the market. The company attributes its improved performance to technology-driven efficiencies, with automated approvals for customer queries increasing from 30% to over 70%. This shift has streamlined operations, reducing turnaround times and enhancing customer experience. Rentomojo has also achieved gross margins exceeding 60% and maintains a high inventory occupancy rate of 85%.
Looking forward, Rentomojo aims for a revenue growth target of 40% in FY25, with ambitions to reach an EBITDA of INR 100 crore and net profits of INR 40 crore. The revenue streams are currently evenly divided between furniture and appliance rentals. The company operates 20 warehouses and utilizes third-party logistics for deliveries, which has made it particularly appealing to young professionals and migrants seeking affordable furnishing options.
Investor Confidence and Future Prospects
To date, Rentomojo has successfully raised USD 93.2 million (approximately INR 800 crore), including INR 210 crore (around USD 25 million) from its latest funding rounds in February 2024. The funding was led by Edelweiss Discovery Fund Series – I and ValueQuest Scale Fund, comprising both primary capital and secondary share sales.
The company’s last known valuation stood at USD 110 million (approximately INR 945 crore). Given its strong performance and ten consecutive quarters of profitability, sources indicate that the upcoming funding round could see a significant increase in its valuation. Major investors include Accel (21.42%) and Chiratae Ventures (13.77%), both expected to engage in pre-IPO funding.
As Rentomojo prepares for its IPO, the company’s ability to maintain growth momentum and adapt to a changing consumer landscape will be closely monitored. With a solid FY24 performance and ambitious plans for FY25, Rentomojo’s IPO could serve as a landmark event not only for the company but also for the subscription-based rental economy in India.
