Ajith Karimpana, founder, Lightbox-backed Furlenco, is convinced that his business model of renting furniture to expats, employed youth and people with moving jobs, has the potential to scale up tremendously
We buy our furniture and furnishings with great care, and sometimes, at great cost. But if and when the time to sell it comes, it can turn into a nightmare on two counts; one is the paucity of buyers of second hand furniture, and two, the low price it commands regardless of the condition it is in.
Ajith Karimpana had such an experience. When working in the U.S. his wife and he bought furniture worth US $5,000, but when they were shifting to India, they had to be satisfied with US $300 in 2009. Subsequently, their experience of buying new furniture to set up their new home in Bengaluru where he was to head the Asia Pacific regulatory operations of Goldman Sachs, turned out to be much less than satisfactory. The delivery was delayed by almost a month and a half and what landed up wasn’t quite what was ordered.
Realising this was not uncommon in India, Karimpana wondered how he could improve the home setup experience of people moving back to India. Renting furniture seemed to be the ideal solution but there were no businesses offering quality furniture for rent. “There are shops where you can rent furniture but you are not assured of design or quality,” explains Karimpana.
This is when the idea took shape in Karimpana’s mind and even while working, he bought furniture and stocked it in the third bedroom of his house. But not knowing how to spread the word, it remained there for close to nine months when his friend, who was shifting from Mumbai to Bengaluru made an offer to rent it. He wanted to customise the pieces and Karimpana worked with a furniture boutique to implement the changes.
Once Karimpana was sure of this growing need he placed a local advert and got an enquiry. From there his journey began in right earnest. He quit his job and ran his one-man show from home by making cold calls and sending PowerPoint presentations to corporates who had a moving population to win orders. When he started getting repeat orders and a continuous flow of business, in 2012, he roped in a friend as co-founder and founded Bengaluru-based Furlenco.
Building new business
“We did not do much research initially and served customers, mostly expats, as and when demand rose. But once I decided to enter the business full-fledged, I studied the market and realised that a large part of India still sleeps on the floor despite being able to afford furniture,” he points out. Indian youth between the ages 24-34 enter the workforce and are hopping jobs and locations. Housing and furniture are complicated decisions needing high investment, which they tend to postpone till they really cannot avoid anymore. Also, many expats and Indians moving back to India like to wait for the same reasons. So, renting furniture is a viable option because of the cost advantage. But, at the same time, it also has to be tasteful and come with an assurance of quality.
Karimpana therefore created designs and worked with the same boutique he had contracted earlier to create standard designs in solid wood that met the aspirational needs of urban India. The designs and the materials used, ensure optimum use despite multiple shifts. There is a damage fee on the rental, but only if it exceeds Rs. 10,000. “I don’t think people want to damage furniture and till now, I have not suffered because of my customers,” Karimpana says light-heartedly.
Framing the right space
Initially there was no science to pricing, but over the last few years, Furlenco has arrived at the right pricing through trial and error, he adds. There are two packages; per room packages and for the entire home depending on the size of the house. For instance, a bedroom package is currently priced at Rs. 2,000 and includes a queen size bed and mattress, two bedside tables, table lamp, photo frame and soft furnishings. Customers can rent for as long as they want and even swap furniture to get a new look. “In the last two and a half years since starting, we have served nearly 1,000 customers and currently have 500 active customers,” he says.
In January this year, the company received Series A funding of US $6 million from Mumbai-based Lightbox Ventures, which has been used to expand the asset base of the company. While an in-house team designs the furniture, it has outsourced its manufacturing. It has also invested in logistics to control the last mile and ensure safe transport of its wares.
Furlenco has 10,000 sqft. of warehouse space, which it expects will expand to nearly 50,000 by the end of the year. Currently present only in Bengaluru, it is planning to expand to Mumbai and Pune in the near future.
The current team size is at 80, including the delivery team and is expected to grow to 800 by the end of the year. The company has experienced a month-on-month growth of 100 per cent since last year and Karimpana thinks he has only scratched the surface. With very few brands in the furniture segment, reliability, pricing and quality are going to be the game clinchers for Furlenco.
“Furniture in India is primarily a handicraft and so the supply is far less than the demand. As more organised players enter we expect this trend will change,” Karimpana suggests. He expects Furlenco will benefit from its first-mover advantage when this does happen and plans to introduce upmarket furniture ranges as well.
In three years, the entrepreneur aims to be in all Tier-I cities across India. “Our vision is that you should just fly with your suitcase, we will supply everything, even appliances, which we added recently,” he shares. Over the coming years, Furlenco simply aims to deliver on the brand promise – the fastest and most convenient way to get a great looking house.
Founder: Ajith Karimpana
Focus: Rental furniture