Short-term apparel rental is a tricky business in India. The country doesn’t seem to be ready for such concept. We are saying this as Flyrobe, sort of leader in hybrid (online plus offline) apparel rental space, has failed to figure out a sustainable business model.
The company has been exploring an acquisition deal with multiple entities, said three sources aware of the development. “Even after spending over 4 years in the space, Flyrobe has failed to figure out a sustainable business model,” said two of the three sources.
Sources requested anonymity as they aren’t authorised to speak to the media.
Flyrobe had raised over $10 million from IDG Ventures (now Chiratae), Sequoia Capital, GREE Ventures and several top-notch angels.
“The firm has been in conversation with multiple firms including Amazon, Future Group and Myntra for an acquisition. The deal is likely to be distress one irrespective of who would buy it,” added sources.
It’s worth noting that Flyrobe had partnered Myntra to offer special occasion outfits on rent including weddings and parties for men and women in February this year. Besides online store, the company also has offline outlets in Mumbai, Delhi, Bengaluru, Hyderabad, Pune, and Ludhiana.
The firm also raised capital from Vijay Shekhar Sharma, Sandeep Tandon, Kunal Shah, Zishaan Hayath, Rohit Bansal, Kunal Bahl, and Abhishek Jain in individual capacity.
Sources asserted that the firm also tried raising follow-on capital from new and existing investors. However, they aren’t convinced about the scope of business viability as well as sustainability.
Queries sent to Flyrobe and Chiratae didn’t elicit any response till now. We will update the post as and when they respond.
Flyrobe is the only apparel rental business that has achieved some scale. Rest of the players in the segment are small and don’t have backing from venture capitalists (VCs). While rental has been gradually catching on in categories such as furniture, home appliances and automobiles, apparel and accessories renting as a concept didn’t bode well with millennials across top metros.
Flyrobe’s failure also hints that rental economy will take some time to find takers in India. Many entrepreneurs think that India is ready to embrace the sharing economy like China. But clearly, that’s not the case. So, this is a reality check for many who aspire to rent power bank and umbrella on the lines of Chinese entrepreneurs.