 "SabRentKaro in talks to raise Rs 30 crore from PE funds")
Hyderabad-based online renting platform SabRentKaro is in final talks with a private equity firm to raise around Rs 30 crore within next three months.
"We are discussing with an Indian PE firm to raise $5 million by January 2017. With these funds, SabRentKaro is planning to extend its presence and strengthen its rent2own (R2O) services," founder and CEO of the company Raj Sivaraju told Business Standard.
Explaining about the R2O concept, he said, "We offer a wide range of things from a book to an aeroplane on rent for both B2B and B2C clients. We have recently introduced R2O option in B2B space, which allows the customer to own the product after paying rent continuously for a certain period."
Taxi-hailing app Uber has partnered with the firm to provide 2,000 mobile devices to its driver partners on R2O basis. As part of Uber's bring your own device (BYOD) scheme, its driver partners who used to rent a smartphone from SabRentKaro for Rs 300-500 per week, can own the device by paying 20% extra under the R2O scheme, according to Raj.
Similarly, logistics firm Ambily and employee transport company HopOn have partnered with SabRentKaro to avail mobile devices. Paying guest accommodation provider Zelo also associated with the company to receive beds in the same way. It is working with several other companies such as Swiggy and ITC to give more products on R2O basis.
According to him, a Mumbai-based hyperlocal delivery chain is willing to take around 1,800 bicycles through their company by next month. A software company is going to tie up with it for the entire office equipment including furniture and electronics on R2O to start 5,000-square feet office in Hyderabad that would cost them more than Rs 50 lakh.
When asked about the investment needs, Raj said, "We have so far raised $500,000 from angel investors and friends. Other than the $5 million that we plan to raise by January, we are looking to raise another $15 million (around Rs 100 crore) from the US counterpart of the same PE firm to invest in the R2O model over the next 18 months."
At present, SabRentKaro is offering its services in four cities - Hyderabad, Bengaluru, New Delhi and Visakhapatnam. It aims to expand to six cities - Chandigarh, Kolkata, Surat, Vijayawada, Mysuru, and Cochin by mid-2017.
The one-year-old startup expects five-fold growth in its revenues up to Rs 2.5 - 3 crore per month by the second quarter of next fiscal from the current Rs 48 lakh per month. The firm is hopeful of turning profitable by the end of next financial year.
