STARTUP ECONOMICS · DEEP DIVE

It's not a furniture app. It's a depreciation bet dressed up as a subscription.

Picture this: you've just landed a job in Bengaluru. You move into an empty apartment — no bed, no sofa, no fridge — and you have no idea if you'll still be in that city a year from now. Buying ₹1 lakh worth of furniture makes zero sense. So you open an app, pick out what you need, and pay a monthly fee instead.

That's the pitch. It isn't, however, the interesting part of the story.

The interesting part is that Rentomojo wasn't even the first company to try this — Furlenco got there earlier, and countless unorganised local vendors had been renting out furniture offline for years. Yet today, Rentomojo commands more than 50% of the market by number of subscribers, and roughly 42–47% of India's organised furniture and appliance rental market by revenue.

So the real question isn't what Rentomojo does — it's how it out-scaled everyone else, and what's really happening financially behind that clean, simple-looking app.

Company Snapshot

The Asset-Light Pitch, and the Not-So-Light Reality

Rentomojo is often described as “asset-light” because it doesn't manufacture anything itself — it partners with manufacturers, vendors, and even individual asset owners to source furniture, appliances, and electronics that customers rent every month, which keeps upfront costs down and allows rapid scaling.

But here's the catch that rarely makes it into the marketing copy: when Rentomojo buys a refrigerator, it pays for it immediately. The customer pays it back slowly — over months, sometimes years, and often across multiple different renters. Every purchase is essentially a bet: will this asset earn enough rental revenue, from enough people, before it wears out or needs replacing?

→  That single mechanic — buy now, collect later — is the engine of the entire business.

The Three-Stack Flywheel

To make that bet pay off again and again, Rentomojo built what it calls a three-layered flywheel:

● 1. The E-Commerce Layer — Deliveries, installations, doorstep repairs, relocations, and reverse pickups all run through the same shared logistics network, which gets cheaper per unit as volume grows.

● 2. The Subscription Layer — The goal is simple: keep the customer renting for as long as possible. The average subscription lasts roughly 18 months, and every extra month squeezes more value out of an asset that's already been paid for.

● 3. The Re-Commerce Layer — Returned furniture and appliances don't get scrapped. Rentomojo refurbished over 6 lakh items in FY26 alone, against roughly 8.5 lakh items rented out that year — turning “returned” inventory back into revenue-generating inventory instead of dead stock.

Where the Actual Money Comes From

Strip away the flywheel language, and Rentomojo's income lands in a few concrete buckets:

● Monthly rental subscriptions on furniture, appliances, and electronics — the core, recurring engine, with income drawn from leasing everything from sofas and beds to washing machines.

● Value-added services — delivery, installation, maintenance, relocation support, and buyback options, each carrying an additional fee.

● Customer sub-leasing — in an unusual twist, Rentomojo allows customers to sublease the assets they've rented, opening up an additional revenue stream.

● Asset-financing partnerships — in its early scaling years, Rentomojo began working with banks that paid to buy the assets outright, taking a cut of the rental returns each one generated. Founder Geetansh Bamania described the unit economics simply: roughly every $100 of input generates about $10 in monthly revenue, a portion of which flows to the financing bank, with the rest going to Rentomojo.

Now, the Numbers That Actually Matter

This is where the story gets genuinely interesting — and where most surface-level explainers stop too early.

→  In FY26, Rentomojo reported EBITDA of roughly ₹163 crore on revenue of about ₹387 crore — a cash operating profit margin of around 41%.

For a consumer subscription business, that's an eye-popping number. But EBITDA conveniently ignores depreciation — and for a company whose entire model is “buy the physical asset, then rent it out,” depreciation isn't a rounding error.

→  Rentomojo recorded around ₹70 crore of depreciation in FY26 — more than 40% of its EBITDA.

And then there's the capex reality check:

→  In FY26, Rentomojo spent roughly ₹176 crore on capital expenditure while generating about ₹173 crore of operating cash flow — meaning that after buying the physical assets needed to run and grow the business, it had negative free cash flow left over.

That doesn't automatically mean something is broken — a company buying more washing machines because demand is growing is investing in growth, not just patching leaks. But it does mean Rentomojo sits in an odd middle ground: viewed as a subscription platform, the 41% EBITDA margin looks fantastic; viewed as an equipment rental company, depreciation, maintenance capex, financing costs, and each asset's usable life suddenly become central to the story.

FY26 Financials at a Glance

The Profit Number Needs a Footnote Too

Rentomojo reported a FY26 profit after tax (PAT) of roughly ₹104 crore — a sharp jump from ₹43 crore in FY25. Impressive on the surface. But dig one layer in:

→  Around ₹37 crore of that FY26 profit came from a deferred-tax credit — an accounting recognition of tax benefits from the company's past losses, which it expects to offset against future profits.

Strip that one-time accounting boost out, and the underlying operating performance — while still solid — is meaningfully less dramatic than the headline PAT suggests.

So Does the Model Actually Work?

This is the question that decides whether Rentomojo is a great business or just a well-marketed rental shop. And the company's own asset-level data offers a genuinely compelling answer:

→  Assets purchased in FY17 had already generated revenue equivalent to 5.1 times their original cost by FY26, and 56.1% of those assets were still generating revenue. The FY18 cohort had generated around 4.5 times its original cost, with 60.9% still earning revenue.

In plain English: furniture and appliances Rentomojo bought nearly a decade ago are still earning rent today, having already paid back several multiples of their original price. Depreciation on the books doesn't mean the physical assets are actually becoming worthless — it just means accounting rules write them down faster than they're really wearing out.

The Real Trade-Off

The same assets that let Rentomojo generate recurring, subscription-like revenue also force it to keep pouring capital back into the business as it grows — because bigger scale needs more physical inventory, and that inventory eventually needs replacing. If the company can keep those assets rented, keep them productive for years, and refurbish them cheaply through its re-commerce layer, the underlying economics hold up nicely.

Whether that holds true forever — especially for electronics and appliances that age faster than furniture — is the question that will really decide Rentomojo's fate as it heads toward a public listing.

The Bottom Line

→  Rentomojo doesn't make money by “renting furniture.” It makes money by treating every sofa, fridge, and washing machine as a long-duration financial asset — squeezing years of subscription revenue, resale-grade refurbishment, and value-added fees out of a single upfront purchase, while quietly betting that customers, and the assets themselves, will keep coming back.

Note: Figures are as reported in the sources above (FY26 = fiscal year ending March 2026, per company filings referenced therein). ₹ = Indian Rupee; 1 crore = 10 million.