While planning a trip to Goa with family and friends, Sneha, a resident of Powai in Mumbai, got fascinated by the idea of capturing the entire trip on a GoPro camera, and turn it into memorabilia. Though she could afford to spend Rs 40-45,000 for the camera, she decided to look for renting options, because a GoPro would be of limited use to her in future. She was thrilled when a google search to rent a GoPro led her to eazyleazy.com. "The GoPro Hero4 Black on the site was very affordable (Rs 2,800 for a week); I messaged them and got a reply within minutes. The camera was delivered in a neat box with a bunch of extra bits like mounts and waterproof cover. Thanks to them, I was able to film my whole trip," she says.
EazyLeazy is a Mumbai-based online rental company started by two chartered accountants, Peshotan M. Kapadia and Meheryar Tata, targeting the billion-dollar (estimated) lifestyle and entertainment equipment rental industry in India. Kapadia (30) and Tata (28), friends since school, are music buffs, and were part of a music band called Big Red Bus. Kapadia worked with the Boston Consulting Group and EY for over six years, while Tata worked with Deloitte for seven years, before turning entrepreneurs.
"We were finance guys who specialised in risk management, strategy and retail markets, and had the experience of working with numerous clients and solving their problems. We thought of starting something of our own that would give us the joy of building a business from scratch," the duo says.
They evaluated several business ideas for two years before deciding on EazyLeazy. "With the economy growing, there are millions of people with growing lifestyle aspirations. But, at the same time, they are prudent enough to not spend lavishly. For example, you may want a smartwatch and would like to wear it for a week or two, but wouldn't want to spend Rs 35,000 on it. Or, you may want to try it before you buy it," say Kapadia and Tata, on why the consumer durables segment in the lifestyle and entertainment sector is a lucrative one.
EazyLeazy started operations 11 months ago, and currently offers on rent more than 20 types of products in the travel, party, audio-visual media, hobby, and try-to-buy categories. DSLR cameras, GoPro, Kindle, Karaoke packs, drinking games pack and card games, hoverboards, smartwatches, ovens, casios, etc, are some of the products it rents out. It claims to have an advantage over competition with its reasonable pricing. "We offer the cheapest rentals in the online market, delivery within three hours in Mumbai, and free logistics, demo and service, within the rental price. We try to keep the price reasonable so that people can use different products through the year to improve their experiences."
EazyLeazy charges Rs 1,200 for a karaoke machine worth Rs 30,000 during a weekend, and Rs 2,500 per week for a basic DSLR, which costs over Rs 25,000. The cost includes pick-up, delivery, set-up/demo and taxes. It also charges a refundable security deposit, which is normally 10 per cent of the value of the asset. Unlike other subscription or membership-based business models, it does not charge any annual fee. EazyLeazy prefers to own the products it rents, to ensure easy availability, lower prices, and guaranteed quality.
Vivek Mehetre, a Thane-based motivational speaker and stand-up comedian, prefers renting digital projectors from EazyLeazy to buying one for his shows. "If the organisers do not have a set-up for digital presentation, I hire LCD projectors from EazyLeazy. Their rates are competitive and affordable, and they respond to my orders immediately," he says.
How many rentals recover the product cost? Kapadia says that depends on the length of the rental and the life of the product. "We typically recover the capital in 10-20 rentals," he informs.
So far, the duo has invested close to Rs 30 lakh, personally, for the equipment, warehouse, operations and marketing. It has managed to generate revenue of over Rs 25 lakh from its 900-odd clients. Out of the eight people in the team, operating out of a small office, four handle marketing and one is a technical expert in charge of demo and training (for the client). The promoters are in discussions with venture capitalists, and are looking to raise about $1-1.5 million to scale up operations.
The online renting services industry is burgeoning, and has attracted investments worth over $2.4 billion since 2011 globally, according to data from Tracxn. In India, too, internet-based renting services are becoming popular, but scaling up is not easy. "The consistent infusion of funds required for scaling up is a big constraint for online companies operating in the adventure, sports and entertainment sector," says Jithin Raj, a Bangalore-based entrepreneur working on an online portal in the same space.
Tracxn lists 25 Indian companies in the sector, some of whom have been able to attract substantial investments, as per its data, by first half of 2015 (see Funding Boost). The online entertainment and lifestyle rental space, in which EazyLeazy operates, has players such as RentSetGo, with a presence in almost 17 cities; Bangalore-based RentSher, which received seed funding of $300,000 in February this year from HNIs, and Mumbai-based Mutterfly.
Kapadia is not in a hurry to expand operations. "The next phase of growth will be restricted to Mumbai for another four quarters, to reach a customer base of 20,000," he says. The four metros and Pune will follow. Besides, EazyLeazy will add a few more categories to its portfolio - in the realms of fitness, adventure and camping, baby products and spares. "We want people to think of us if their fridge broke down or phone got stolen or if they need extra mattresses and beds when visitors come?we can offer these on rent for a week," Kapadia adds.