Rentomojo posts Rs 193 Cr revenue in FY24; profits jump 3.6X

After experiencing flat growth for consecutive fiscal years (FY22 and FY23), furniture rental startup Rentomojo achieved a 60% increase in revenue in FY24. Simultaneously, the company more than tripled its profit during this period. This substantial growth and sound financial performance enabled Rentomojo to secure $25 million in equity funding in February this year, following a gap of over two and a half years.

Rentomojo’s revenue from operations grew to Rs 193 crore in FY24 as compared to Rs 121 crore in FY23, its annual financial statements sourced from the Registrar of Companies show.

Founded in 2015, Rentomojo operates across 19 cities and has approximately 30 offline stores. The company's primary revenue stream comes from furniture rentals. Additionally, it generated Rs 3 crore from interest on deposits, bringing its total revenue to Rs 196 crore in FY24.

The furniture and home appliance rental company allocated 18% of its total expenses to employee benefits, which rose by 34.8% to Rs 31 crore in FY24. Meanwhile, its expenses on rent and provisions for doubtful debts stood at Rs 10 crore and Rs 4 crore, respectively.

Advertising, information technology, logistics, warehousing, outsourced labor, and other overheads brought Rentomojo's total expenditure to Rs 174 crore in FY24, marking a 48.7% increase from FY23.

The 60% growth in scale and effective cost management helped Rentomojo achieve a 3.6x increase in profits, reaching Rs 22 crore in FY24, up from Rs 6 crore in FY23. Its ROCE and EBITDA margin were positive at 19.65% and 33.67%, respectively. On a unit level, it spent Re 0.90 to earn a rupee of operating revenue in FY24.

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Rentomojo has raised over Rs 650 crore across various funding rounds, including its latest $25 million round led by Edelweiss. Notable investors include Accel, Chiratae Ventures, and Bain Capital.

The company competes with Furlenco, Rentickle, Cityfurnish, and, to some extent, Pepperfry. According to media reports, the Geetansh Bamania-led firm is also preparing for an initial public offering (IPO) within the next 18 months.

While we don’t have a breakup for Rentomojo’s earnings by categories, the firm’s expansion into multiple categories is interesting, especially segments like fitness equipment, appliances  and the like. Even otherwise, the furniture rental market offers a fascinating opportunity to understand customer definitions of value versus convenience. Does rising cost of wooden furniture support demand for rentals? Or is the market shifting towards renting even for cheaper furniture? How much of the furniture survives beyond its depreciated life, to deliver extra profits? Rentomojo has clearly cracked the formula for now, and is reaping the benefits, with the promise of more to come, as the market opportunity remains relatively vast.