Furniture rental firm Furlenco, backed by mattress giant Sheela Foam with a 44.6% stake, posted its first-ever profit of `3.1 crore on revenue of Rs 240 crore in FY25. Co-founder and CEO Ajith Mohan Karimpana tells Anees Hussain that the company is betting on a manufacturing first, premiumisation and distribution-led model.
Your rival Rentomojo has filed for an IPO. What is Furlenco’s timeline?
We are in no rush. We would like to see three years of profitability. FY25 was our first year of profitability. In FY26, we expect to hit Rs 340 crore in revenue, at 10% profit before tax. One more year of profitability, and then we will think of it. Our focus is on reaching 20% margins through expanding our in-house capacity for design, manufacturing, and refurbishing. This business is meant to be a high margin one when done correctly.
Furlenco was loss-making for years. What has changed?
We are at an inflection point in terms of scale. This is an extremely high operational business — you create the category, build the brand, set up warehouses, manage logistics where trucking costs are double because you deliver, take back, and relocate. All of that needed capital.
On top of that, we decided to manufacture, design, and refurbish in-house. Now, our active subscriber base has reached a point where we generate enough cash to service operations, pay interest, and pay down principal. After all that, we still have cash left. In 2-3 years, we will be debt-free and funding our own capex.
How does Sheela Foam fit into this?
They hold 44.6% and provide two big things. One, foam and mattresses come at cost price – that is 20% of our assets. Two, distribution. Where Rentomojo is opening store after store, which is huge capex, we are doing shop-in-shop through Sheela Foam’s 5,000-dealer network. We are targeting 500 points in the next 18 months. Customer experiences the furniture there, books the order, and we fulfil from the backend. It is commission-based and asset-light.
What is the manufacturing scale now?
For the last two years, 100% of deployed assets are from our own manufacturing. Every piece is designed by us. We built platforms where looks can change, but you get manufacturing optimisation. A sofa that costs `25,000 from a vendor we make at `15,000. Our competitors haven’t built manufacturing capacity as of yet. We have picked German equipment over China-made. Same with wood – sheesham and acacia for dining tables and neem for sofas because it repels pests. We always lean towards longevity over cost. When the same asset cycles through multiple customers, how long it lasts is everything.
You have also started a B2B vertical.
We have built a B2B team going after enterprises who want rent-to-own — use furniture for three years, pay in instalments. We are leveraging the same manufacturing and design assets. Incremental revenue without incremental capex.
What new segments are you exploring?
Kids’ furniture. It is perfect for rental. You buy a cradle, the child uses it for six months, then it sits in storage for years. We designed a modular cradle that adapts as the child grows – works for 0-6 months, then 6-12, then 12-24 months. Same with bunk beds. This is furniture with a short usability window but high upfront cost. Rental solves that problem completely.