The leading furniture rental company in India under the subscription-based model, Furlenco, has managed to raise a new financing round, amounting to a total of ₹125 crores (approximately $15 million). This major inflow of capital was led by Sheela Foam Limited, parent of Sleepwell, as another move to invest further in the furniture rental space. Other important investors, such as Whiteoak and Madhu Kela, were also involved in the round. This investment is an essential move towards Furlenco as it swivels to the greater distributions and readiness of the public market and establishes its footing in the Indian home solutions market.

Strategic investment and financial performance

The investment by Sheela Foam Limited stands out especially since it is the first investment option by the company in Furlenco after undertaking a substantial acquisition operation in July 2023. By the time, Furlenco had a huge 35% stake in Sheela Foam. The initial transaction had a huge cash investment of ₹300 crore, which made Sheela Foam a key investor and a strategic partner of the subscription company.

This funding round of ₹125 crore is also a further reinforcement of this financial relationship, as it shows that Sheela Foam has faith in the business model and the long-term viability of Furlenco. Whiteoak and Madhu Kela’s involvement highlights the institutional and individual interests of investors in the company.

In addition to the scale of operation, Furlenco has recently experienced an impressive financial turnaround, where it has breached the most important barrier of profitability. As it was reported by the startup data intelligence platform TheKredible, Furlenco turned profitable during the financial year FY25.

The figures show that the company achieved ₹240 crore revenue and ₹3 crore profit in FY25. It is an enormous contrast to the previous financial year, FY24, when the company had registered a massive loss of ₹139 crore. The company credits this massive change in its financial well-being to the advancement of its subscription model as well as the increased efficiency of its capital allocation strategies.

In terms of the total fundraising, Furlenco, according to TheKredible, has raised a considerable amount of total funding of $313 million to date. Sheela Foam and Lightbox Ventures are the lead investors that will contribute to this total. The shareholding structure indicates that, as of its last funding round, the founder and chief executive of the company, Ajith Mohan Karimpana, owned 12% of the company.

Operational achievement and primary objective

The new capital raised during this round will be used for various strategic plans to grow the business and make it a significant milestone. Furlenco will utilise the funds to realise three main goals: developing its product portfolio, enhancing the operation of omnichannels, and preparing the business strategically to go to the public market. The latter goal will be sought in terms of attaining wider distribution and achieving scale in its business lines.

This drive to scale of operation and the readiness to serve a public market, according to statements issued by Furlenco, is a long-term plan. The company, which is a major element of this strategy, has proclaimed that it is currently planning a possible Initial Public Offering (IPO) within the next few years. It is an indication of an aspirational transition, as a successful venture-backed company, to a publicly traded organisation, in search of capital via the larger market.

Furlenco was founded in 2012, and it was the first furniture company to boast of a subscription-based model in the Indian market. The company has, since its inception, undertaken several equity and debt rounds. Its prominent investors in the past are its present lead investor, Sheela Foam, and other venture capital organisations like Lightbox Ventures, Crescent Ventures and Eagles. The stability of this history of funding is a sign of a strong business model that has been able to draw and maintain substantial investor attention over the years.

At the operational level, the firm has gained significant coverage and size in the country. Since it was established, Furlenco has boasted of having provided more than 10 lakh residences across India. The company has a considerable number of users with over 1.5 lakh active subscribers.

Besides the main line of business of rental, Furlenco has diversified its services to offer a full line of home services to its customers, which can be both rented and purchased, as well as refurbished furniture. This diversified strategy aids in supporting the needs of various consumers and squeezing the maximum lifecycle value of its assets.

Conclusion

The effective raise of ₹125 crores by Furlenco through Sheela Foam, Whiteoak, and Madhu Kela is a milestone in the business journey of the company. This capital, along with the fact that the company has just reached profitability in FY25, puts Furlenco on the path of rapid growth and strategic focus. With its emphasis on diversifying the product range and enhancing its presence in the omnichannel, Furlenco is slowly creating the required base to fulfil its long-term goal of a possible IPO, which will ensure its position in the Indian furniture and rental industry as one of the major innovators.