RentSmart - the fully insured online marketplace to lend and borrow items
By Kiran Kaur Sidhu February 24, 2021
- User verification with identity card or passport prevents unscrupulous claims
- Plans for the year include raising funds and on-boarding event & prop rental companies
The thought of earning income from renting out expensive, underutilised items in your possession is appealing. But the risk factor of items being damaged can certainly be off-putting. It is a pain point that Rentsmart Asia recognises and that is why the platform, which offers both business to consumer (B2C) and peer to peer (P2P) item rental, is fully-insured.
“RentSmart was conceptualized because we believe people don’t have to buy the things they only use occasionally, relieving one the burden of buying and maintaining new assets. Whether it’s financially or environmentally driven, with today’s global economic pressure, people are less and less interested in owning things,” notes Indran Gegathesa (pic, left), the founder and chief executive officer who did a soft launch to the public in June 2019 after working on the idea that first came to him in early 2018. "We made a quick pivot from being peer to peer (P2P) focused to B2C focus in Dec 2019 and officially launched the site the same month." The traction with onboarding merchants to the platform was hit by Covid-19 in March 2020. Nonetheless, RentSmart has been able to grow to a little over 250 merchants to the platform today.
[Ed: Paragraph updated for accuracy.]
Becoming the first-of-its-kind Malaysian rental platform underwritten by brokers was no easy feat. Traditional insurance providers and boutique agencies were reluctant to cover the risk and brokers were unresponsive at the beginning of the journey. “We sort of started the company, got the tech done three-quarters of the way but we still couldn’t solve this problem,” said Indran.
The platform was co-founded with Indran’s business partner, Parthiven Shan, who at that time was also running ticketing platform, Tripcarte Asia which he founded in 2015. But with Parthiven busy with Tripcarte, in Aug 2020 Indran brought in a new cofounder, Deepan Kannan, with Parthiven leaving to focus fully on Tripcarte. Deepan was a cofounder at Vettons in 2017 and is now as advisor to the e-commerce startup.
[Ed: Para edited for accuracy.]
Currently, RentSmart Asia has 25,000 registered users and 250 listed vendors. Users can search for the item of their choice on the homepage from a wide range of product categories which include electrical and electronics, film and photography, clothing and accessories, kids and babies, sports gear, mobile devices and event props.
Despite the momentum it gained, the duo had thought of killing the idea since it was nearly impossible to secure insurance, a key facet of the business without which vendors would not have placed their products on Indran’s platform.
But fortune certainly favours the brave. While participating in a Startup Challenge hosted by the Kuala Lumpur & Selangor Indian Chamber of Commerce & Industry (KLSICCI), the panel of judges were keen to know if the insurance model worked. Feigning confidence, Indran pitched the idea as a working model and told the judges more details will be revealed later.
“To win the competition, I decided to knock on every single door I could think of,” he said. Using LinkedIn, he reached out to 12 different local and international brokers. That last-mile push proved fruitful and they managed to leverage a deal. “We didn’t win the competition, we got second place. It was still a good experience for us. We didn’t get the funding but we secured our insurance.”
How to list and make insurance claims on the platform
For Indran, it was his road-biking interest that led him to start RentSmart Asia. After spending US$600 (RM2,500) on a road bike bag to use only once during an overseas competition, Indran later discovered, other hobbyists were in the same boat as him – in possession of expensive, underutilised items.
Although items listed on RentSmart Asia are insured in case of damage, Indran urges people to take precaution by not listing items that hold sentimental value. Just like Grab and Airbnb, the platform does not own any inventory. “We are a platform allowing owners or store owners to [offer items for] rent online and other users to come search for things available and for rent.”
There is no set criteria of items to be listed on the platform but the listing process requires owners to upload display images and indicate any pre-existing damages or part replacements of the product. The owner also needs to fill information fields of value purchased, when it was purchased, and the current market value on second hand markets.
For example, clothing items such as costumes are insured for about UD$124 (RM500) while wedding dresses can be insured up to a few thousand Malaysian ringgit. “That said, when a renter picks up the item, the owner is still supposed to take pictures or videos of the item, depending if it has moving parts, to show that the item is working. When the item is returned, the owner is supposed to make sure everything is in order. If it is not, take pictures and send them to us. Then, we will do the necessary claims,” he explained.
A main concerns when starting RentSmart Asia was if the platform would be exploited by users putting items up for rent and unscrupulously claiming insurance. “Surprisingly, Malaysians are a lot more trustworthy than we give them credit for,” shared Indran.
Out of 400 rental transactions on the platform to date, only one has resulted in an accidental damage. However, the owner was kind enough to take ownership of the damage and the renter was not charged a fee. “Of course, in good faith because of what he had done, we also did our best to help him out with the insurance and he got 75% back.”
But good faith can only go so far as a business model. “We don’t completely depend on external factors. We let it take its course but we have taken our own pre-emptive measures to make sure checks are in place. First thing we do, when you register on the platform, you have to get verified.”
Item owners are required to upload a selfie, verify themselves against passport or identity card and transactions must take place on the portal. “So we do have a lot of information if we do need to take further action. But, so far, we have not really needed to use it.”
Business growth during Covid-19 and future plans
“When we first started, we were focusing on Costumes and Camera rentals. However, due to the pandemic, all events-related businesses slowed down. Consequently, we felt the brunt of MCO - but before long, there were other categories that started to pick up. We had more laptops and gaming equipment being rented on our platform,” shared Indran, adding that 24% of its customers are returning customers.
Within the Malaysian market, there are a couple of players that have struggled to take off in the past. Indran believes that RentSmart Asia’s winning edge over its counterparts is its insurance model which eliminates risk for the platform. The platform has also moved to a B2C model rather than just P2P. “It’s good to do B2C because with one business we get over 15 pieces of inventory. It is also appealing for businesses because there is a drive for them to be online.”
In terms of funding, the company has bootstrapped since its inception. However, it is looking to fundraise RM500,000 this year. “We are open to raise from angels, equity crowdfunding (ECF) and potentially private equity,” said Indran.
[RM1 = US$0.247]
On the purpose of the funds, he responded via email: “We intend to grow the user base, add more merchants and educate the market of our existence and how we can help them save as much as 90% as opposed to making a capital expense i.e. buying. Customers will also benefit by getting quality products at the fraction to buying price; best of all, they are not contributing to the demand for counterfeit products. Renting helps us create a more sustainable future.”
With a name like RentSmart Asia, the intention of expansion beyond Malaysia is clear. “Our immediate expansion plan would be Singapore and Indonesia. And then, perhaps Philippines.” The larger goal for the platform is to exit through a third party acquisition. “We were working towards a five-year timeline but we might need to stretch out a little because it is looking a little harder than we initially anticipated,” said Indran.
As for its 2021 plans, on top of growing its customer base, RentSmart Asia’s primary goal is to provide rental companies an online platform to feature their products. “Throughout this pandemic, the equipment and prop rental businesses are one of the hardest hit, partly because they do not have an online presence. We want to be their Shopee or Lazada for rental,” he said.
Related Stories :