Fat Lama, the startup that gives a completely insured peer-to-peer rental marketplace for almost anything, is getting a little bit fatter. The London-based firm has raised $10 million in Series A funding in a spherical led by Ophelia Brown’s recently outed Blossom Capital, with participation from Niklas Zennström’s Atomico and current backer Y Combinator.
Aiming to do for leases what eBay did for purchasing and promoting used objects, Fat Lama was conceived in early 2016 after the expertise its founders had renovating an workplace area in London. They discovered themselves spending nearly a 3rd of their finances on what co-founder and CEO Chaz Englander describes as “single-use” objects that had been tough to lease, corresponding to energy instruments, tile-cutters, and industrial vacuums.
“The probability was that the majority of those items were lying around unused in the same block we were working in,” he says, “but our only option to hire was to go to a rental shop on the other side of town, during working hours, to pay a premium for commercial hire. That was when we had the first conversations about creating a rental marketplace”.
To allow Fat Lama to have likelihood of succeeding the place older rental startups had failed, the staff found out that plenty of issues past merely matching provide with demand would have to be solved. Traditional rental corporations sometimes require the borrower to depart fairly a big money deposit in case an merchandise is damaged, misplaced or stolen. Like-wise, equipment-sharing web sites that don’t require a deposit might be perceived as too dangerous for the lender.
Fat Lama’s answer is to completely insure every merchandise rented for an quantity as much as $30,000, one thing Englander tells me took 9 months to safe and is a serious differentiator from rivals. Borrowers are nonetheless answerable for the total worth of an merchandise in the event that they break or lose it, however the insurance coverage will reimburse the lender if there’s a dispute between the borrower and Fat Lama, or if the borrower merely refuses (or can’t) pay. To additional handle this threat, Fat Lama requires customers to go identification checks, along with using risk-profiling expertise.
“Put simply, we don’t think it makes sense for people to have to buy the things they only use occasionally. And what we’re seeing, whether it’s environmentally or financially driven, is that globally, people are less and less interested in owning things,” says the Fat Lama CEO. “Fat Lama is connecting people with spare stuff to those that need it. By using a combination of risk-profiling technology and insurance, we’re making it not just possible, but safe and seamless, for anyone to have access to almost any item, potentially within minutes”.
There is a group facet to Fat Lama, too, which is one thing Englander is eager to guard whilst the corporate scales. Currently lenders and debtors hand over and acquire objects in individual, the place they usually share experience on learn how to get probably the most out of an merchandise.
“The breadth of rental categories obviously means that we have an incredibly broad user base in terms of demographics,” he provides.
One apparent demographic is inventive professionals, corresponding to DJs, music producers, filmmakers, photographers and artwork administrators, all of whom have “project-driven, often last-minute demands” for area of interest gear. “Many are also sitting on big inventories of gear which they rarely use, from which they’re now generating an income in the thousands,” notes Englander.
Meanwhile, after a profitable launch in New York earlier this yr, together with seeing over 6,000 objects listed on the positioning (provide in New York is claimed to be rising greater than thrice as quick because it initially did in London), Fat Lama is planning to make use of the brand new Series A funding to additional develop throughout the pond. As a part of this effort, the U.Okay. startup is hiring U.S. metropolis managers, in addition to investing in its product, engineering and operations groups again in London.