Why buy a mobile when you can lease one? That’s the thinking behind London’s Raylo, who has raised an additional $11.5 million in funding. The subscription model-based startup offers consumers the opportunity to lease a smartphone for less than the list price over a 12 or 24 month period. At the end of said lease, subscribers have the option to upgrade to a new phone and return the old one.
Founded in 2019, Raylo is banking on industry trends whereby consumers like you and I have become quite used to subscribing to services in our lives. Netflix, Spotify, etc.. However, with hardware, there is of course that prevalent issue of, “what to do with the hardware?” I don’t know about you, but I have a small collection of previously loved phones sitting at the back of a desk drawer.
In the UK alone there are an estimated 125 million smartphones living the same life as mine, and according to some estimates, that translates into each one of these devices only achieving 40% of its potential useful life.
With the Raylo programme, after 12 or 24 months, “old” devices are collected, refurbished, and leased on to the next customer. At the end of their lifecycle, the devices join the great charging cradle in the sky via one of Raylo’s recycling partners.
The startup has seen 10x year-over-year growth, in both customers and revenue, and the new funding is earmarked for doubling the staff count as well as further development of proprietary technologies.
The additional $11.5 million Series A round was led by Octopus Ventures. To date the firm has raised $40 million with backers including Macquarie Group, Guy Johnson of Carphone Warehouse, and the co-founders of Funding Circle.