A London-based mobile phone startup has raised £1.6m for the launch of its subscription model in a pre-seed funding round.
The brainchild of fintech entrepreneurs Jinden Badesha, Karl Gilbert and Richard Fulton, Raylo specialises in a mobile phone subscription model, aiming to offer a more affordable and sustainable alternative to bundled contracts.
Karl Gilbert, Raylo CEO and co-founder, explained: “The mobile networks have not evolved and customers continue to face an outdated product offering, poor experience and endless high-street stores.
“The networks should be treated like utilities and we believe that everyone should be SIM-only – it’s cheaper and more flexible.”
Backed by seed stage-focused venture capital firm Techstart Ventures, the round also had participation from angel investors including Samir Desai and James Meekings, co-founders of Funding Circle.
Raylo’s founders, who have backgrounds in financial services and fintechs, plan to use the funding to bolster Raylo’s proposition, with waiting lists in place ahead the launch of the next iPhone in September and a referral programme.
Jinden Badesha, Raylo co-founder and chief product officer, commented: “The timing is right for Raylo; millions of UK consumers have already switched to SIM-only contracts to save money, and the number is growing by 100,000 every week.”
Offering a combined SIM-only deal including insurance that aims to save money for customers, the startup also aims to be sustainable by taking phones back when customers upgrade, to ensure all phones are recycled and repurposed.
The firm’s commitment to sustainability means that it uses fully-recyclable packaging for its phones, and has established a partnership with compostable phone case producer Pela.
Richard Fulton, Raylo co-founder and chief strategy officer, added: “Every year millions of phones end up in drawers or even landfill – it’s bad for the environment and a waste of money.
“Sustainability is very important to Raylo, we have the benefit of starting from scratch and believe we have a responsibility to do things better than the incumbent networks – for the planet, and our customers’ pockets.”