Before returning to India in 2010, Ajith Mohan Karimpana was the Vice President of Goldman Sachs in the US. Relocating to India brought Ajith face-to-face with hassles like accepting a lousy deal where he was offered only $300 for furniture that he had spent thousands. “It annoyed me. Then, there was a lack of quality options and delays while getting new furniture. I wondered if I should consider this as an opportunity and offer a service that solves these problems and provides a superior consumer experience. That was the inception point for Furlenco,” recalls Ajith.
In the early 2010s, when Ajith established Kieraya Furnishing Solutions and adopted the brand name Furlenco, India was just getting familiarized with e-commerce platforms. Market penetration was low, and people were still apprehensive of sharing credit card details online. Renting furniture without physical inspections was unthinkable. However, an aspirational shift had begun, especially among urban millennials. “Hopping from one city to another for work, they were gradually adopting a more experiential lifestyle. It made financial sense to opt for a subscription rather than buying furniture,” says Ajith.
Furlenco tapped into this space and enabled the urban Indian to live better in their homes by giving them award-winning furniture and home decor on rent. The company has never looked back since. Today, a subscription-driven furniture company with two significant differentiators – unique furniture pieces designed by in-house experts and the impeccable customer service experience – Furlenco has created a brand new vertical.
The Making of a Different Furniture Company
Not known to many, Furlenco was “RentUrDuniya” in its initial days. “After the business gained traction and I had some customers, I decided to incorporate a formal company. I was not sure of the potential of a name like RentUrDuniya since it sounded amateurish,” shares Ajith. The ambitions of Ajith were big, and he wanted a name that would resonate for a long time. He adds, “We eventually decided to choose a name which was not overly sophisticated or scientific, and that is how Furlenco came about.”
Entirely bootstrapped in the initial days, the future was quite uncertain for Furlenco. Ajith opines, “We did not get funding easily because investors were wary of the business idea. We are an asset-heavy business and were operating in a market that did not even exist previously.” Ajith raised small amounts ranging from 25-30 lakhs from well-wishers. He adds,“ In 2014, I raised Rs. 1 Crore from a friend and that was the start. I had also been in discussion with Lightbox Ventures since February 2014, and eventually, in January 2015, they invested $6 million in Furlenco.”
Over the years, Furlenco has raised money through debt funding. “We have so far raised a cumulative total of Rs. 300 Crores in debt out of which we have repaid R. 200 Crores. Our most recent funding stands at $10 million, and we are now comfortably placed on the path to further growth and steady revenues,” shares Ajith. Furlenco has steadily grown at 130 per cent year on year, and the company has already furnished over 100,000 homes in India. “Many of our customers stay with us even when they relocate from one metro city to another. To have the support of such a loyal customer base has itself been a big achievement for me,” pinpoints Ajith.
Started with renting just ten products, Furlenco has now expanded its range that even includes home décor items, appliances, and kid’s furniture as well. Ajith adds, “We keep innovating continuously and plan to introduce more services and products as well as reach out to more cities in the coming years.”
Unlike other furniture brands, Furlenco is involved during the manufacturing process and has a multi-stage quality control process in place. Furlenco also provides various value-added services like Furniture Swap, Free Annual Deep Cleaning, and the option to move the furniture within their network cities for free. Also, Furlenco’s top-rated app is one of the primary reasons for them to have acquired a sizable subscriber base so far.
“We aim to cater to the experiential lifestyles of millennial Indians by offering them an affordable way of life. Our subscribers no longer need to buy furniture, home appliances or spend on expensive décor items. With us, you do not get a typical bed, sofa, or table, but thoughtfully designed and high utility products which appeal to the urban millennial Indian.” opines Ajith.
Standing Tall Despite All Odds
There is no doubt that the current pandemic has hit businesses all over the world. However, Ajith is optimistic about the situation. He says, “We work in the subscription sector, and our products are going to remain in demand. The economic slump is likely to force people to cut down on their spending and adopt pocket-friendly practices wherever possible.” Ajith believes that instead of investing a lot of money in acquiring necessary furniture, subscribing to it will become more viable to the dynamic millennials. “Subscription is likely to become a key part of the ‘new normal’ that we will witness in the post-pandemic world,” adds Ajith.
Although there is a disruption in Furlenco’s operations, and their new business development is on hold, Ajith claims that their cash flow is not blocked. “We are financially steady, and our revenue generation has been consistent so far. Before the lockdown, we had been experiencing a surge in demand for our services across India. Once normalcy returns, we plan to expand our network to 15 cities from the current 8, and cater to more than a million subscribers,” shares Ajith.
Furlenco now aims to achieve a subscription revenue of over ₹2000 crore by the year 2023. “After becoming operationally profitable, we next plan to be EBITDA positive,” pinpoints Ajith. The overall goal of Furlenco is to make furniture subscription as usual as DTH or OTT services. Ajith adds, “We are also going to look into high-income Tier-II cities, and we will have a wider footprint as a customer-centric brand.”
Furlenco is also planning to take the average tenure of a subscriber up to 3-4 years in the future. “Some of our subscribers have spent more than five years with us, and we are focusing on creating a lifelong bond between them and us. We are also a highly responsible brand and integrate eco-sensitive practices into our services. So, we also look forward to further strengthening our commitment to sustainability,” explains Ajith.
Reaching for the Stars
A BTech Graduate in Industrial Engineering from NIT, Jalandhar, Ajith started Furlenco when there was a general belief among entrepreneurs and investors that the furniture rental business had no future. “The e-commerce success stories of today were themselves early-stage startups at that time. Hence there was nobody to look up to,” says Ajith, whose goal is to take Furleco’s subscriber base to over a million.
Furlenco targets to cross a net subscription revenue of over Rs. 2000 Crores by the year 2023. Today, the company’s office in the heart of Bangalore has a very flexible and inclusive work culture and a young workforce of over 400 employees. “Some features of our office include in-house design and photo studio. We are a close-knit team and function more like an extended family,” shares Ajith. Furlenco is also a highly responsible brand and integrates eco-sensitive processes into its services. In future, the company plan to further emphasize sustainability in its operations.
Believing in your ideas and working towards that to make it a reality should be something an entrepreneur strives for. “Quite often, it is the networking that helps you connect with the right people who could help further your business dreams. The most important advice that I would like to share with aspiring entrepreneurs is to network as much as possible,” concludes Ajith.