Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,971.8061.65
Stock Analysis, IPO, Mutual Funds, Bonds & More

Furlenco raises Rs 200 crore in debt and equity financing in new funding round

This is the third investment in the country by Axis Capital Partners, which had earlier backed fin-tech venture uTrade and online marketplace for used automobiles and auto services Droom.

, ET Bureau|
Oct 19, 2016, 12.04 AM IST
0Comments
This is the third investment in the country by Axis Capital Partners, which had earlier backed fin-tech venture uTrade and online marketplace for used automobiles and auto services Droom.
This is the third investment in the country by Axis Capital Partners, which had earlier backed fin-tech venture uTrade and online marketplace for used automobiles and auto services Droom.
NEW DELHI: Online furniture rental venture Furlenco has raised Rs 200 crore ($30 million) in a fresh round of funding that also includes a significant debt component, making it a rare instance of an Indian startup raising traditional financing from the country's banking institutions.

The Series B round of funding has seen the Bengaluru-based company raise debt of about Rs 100 crore from HDFC Bank, the country’s largest private sector lender, and Axis Bank, as well as from non-banking financial company IntelleGrow and a number of undisclosed family offices and high net-worth individuals.

An additional Rs 100 crore of equity financing was pumped in by Furlenco’s existing investor, Lightbox, and a new investor, Hong Kong-based multi-stage venture capital firm Axis Capital Partners, according to Ajith Mohan Karimpana, founder of Furlenco.

This is the third investment in the country by Axis Capital Partners, which had earlier backed fin-tech venture uTrade and online marketplace for used automobiles and auto services Droom.

Karimpana, who was previously with Goldman Sachs, however, declined to disclose the valuation of the company, or the stakes held by the investors, post the closure of the round.

“It was qualified as an asset-heavy business last year, which is true, but with this entire transaction, we now probably have a debt-financed model to fund the asset portion of it. The equity portion of the transaction covers all our EBITDA needs, and to grow the company,” Karimpana told ET.

The company, which owns the furniture it rents out to customers, had floated non-convertible debentures over the last 12 months, that were subscribed to by multiple HNIs, including Gautham Radhakrishnan, partner of Tata Opportunities Fund and multiple family offices.

“A year ago, we couldn't have imagined a company so young would have been able to raise so much debt, especially on the back of an asset like furniture. This is monumental and speaks volumes of the kind of business Furlenco has been building from the very beginning,” said Sid Talwar, partner at Lightbox.

Indian startups raising conventional financing from banks have been rare, with only a few, such as Zoomcar, given that it operates in the commercial vehicles space, and its asset-heavy model, successfully doing so. Most have raised venture debt, an emerging asset class, from the likes of Temasek-backed InnoVen Capital or Trifecta Capital.

“There has been an incremental increase in interest by banks. But, typically, banks look for operating cash flow, profitability, track record, assets, promoter guarantees, among others, which are not easy for tech startups to provide,” said Vinod Murali, managing director at InnoVen Capital.

Flipkart, India’s largest ecommerce company, had set up a cash collateralised overdraft facility with HDFC Bank to meet its working capital needs.

Furlenco, run by Kieraya Furnishing Solutions, was founded in 2012 by Karimpana, a Temple University alum. It had earlier raised $6 million in its Series A round of funding. The company competes with the likes of Rentomojo and Cityfurnish.

“It’s a complete disruption of the (furniture) space, using technology, and it’s something that really hasn’t been done anywhere else in the world,” said Anoop Chaudhri, managing partner at Axis Capital Partners.

Also Read

Aamir invests in furniture renting startup, Furlenco

Furlenco partners with Pocket Aces to target millennials

Furlenco inks co-branding partnership with Airbnb

Online furniture rental company Furlenco ropes in Jatin Sapru for new campaign

Furlenco launches new range of rental furniture at a lower price point

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service