Online furniture rental startup Furlenco, which is run by Bengaluru-based House of Kieraya (HoK), has raised debt from revenue-based financing platform, Klub, against future recurring revenue.
According to a statement by Furlenco, it received capital on revenue-based financing terms from Klub’s latest and by far the biggest fund, Aceler8. The company will use the fresh capital to strengthen business by scaling its operations, a statement said.
Revenue-based financing (RBF) is a model that involves getting returns based on recurring revenue of the firm invested in. Startups that secure capital through this way pledge a percentage of their current gross revenue over periodic intervals as repayment.
“Funds raised through Klub’s platform will allow us to operate and scale our business without any equity dilution. With lifestyle evolving in urban India at an exponential rate, we constantly need to tap into newer potentials and with Klub’s founder-friendly funding approach, we are able to get through this phase,” said Ajith Mohan Karimpana, CEO and founder of Furlenco.
Furlenco, currently operating in the $4.5 billion rental furniture and appliance industry, has a presence in cities including Bengaluru, Delhi/NCR, Hyderabad, Chennai, Mumbai and Pune among others. The offerings range from furniture to appliances on monthly, half-yearly and full-yearly rental basis.
Of late, the furniture rental startup has been in the news after it laid off 180-200 employees in late March citing restructuring. The company has also outsourced key functions such as asset management and asset collection to third parties since then.
Apart from Furlenco, in recent quarters, House of Kieraya (HoK) has expanded its offering via UNLMTD, Furbicle and Prava.
This RBF partnership between Furlenco and Klub comes shortly after the latter recently announced an aim to double its investments from its fund, Aceler8 over the next 2 quarters.
Subhashish Bhadra, Director at Klub said, “We are always on the lookout for brands that simplify user experience and adapt as per the changing landscape. When the opportunity to invest in HoK was subscribed to our platform, our fund, Aceler8, deployed substantial capital with HoK. We see this as the beginning of a long-term partnership.”
Since its launch in December 2021, Klub’s Aceler8 fund has disbursed nearly Rs 50 crore to late-stage online companies for expansion, and inventory purposes. The fund has an average ticket size of Rs 50 lakh-30 crore.
Its portfolio consists of digital business including online apparel platform Bewakoof, gourmet chocolate brand SMOOR, and online grocery retailer Gourmet Garden, among others.
Apart from Aceler8, Klub has 2 more investment options for brands – Blaze and Gro. Blaze offers a working capital partnership with NBFCs for funding from Rs 5 lakh-1 crore over a 3–9-month tenure and Gro is an AIF offering funding from Rs 25 lakh-5 crore with a 12–18-month tenure.