$11.5 MILLION SERIES A RAISED BY RAYLO – THE BUSINESS THAT BELIEVES YOU SHOULDN’T OWN YOUR SMARTPHONE.
The disruptive technology leasing FinTech brand reveals plans to double headcount and expand its product offering after the latest raise, led by Octopus Ventures, the backer of Depop and Cazoo.
Technology leasing FinTech company, Raylo, co-founded by Karl Gilbert, Richard Fulton and Jinden Badesha has raised a further $11.5 million of Series A equity. This latest funding round was led by Octopus Ventures, the backer of Cazoo, Depop and BoughtByMany.
This takes the total amount of equity and debt raised by Raylo to $40 million. Other key investors include Macquarie Group, Guy Johnson of Carphone Warehouse and the co-founders of Funding Circle.
What is Raylo?
Raylo offers a subscription model for smartphones, allowing people to lease for less than the RRP over a 12 or 24-month period. At the end of the lease the customer can upgrade to a new smartphone and then simply return the old one.
Raylo’s circular model of reuse, refurb and recycle means that smartphones are used for 6+ years, addressing underutilisation and waste.
Why is Raylo needed?
Increasing numbers of people are accustomed to paying a subscription to access most things in their lives, however, most still rely on a two-year “buy-and-dispose” cycle for getting their smartphones. This ends up being both costly and terrible for the environment.
“Old” devices inevitably end up stuffed in drawers, with the average smartphone being used for only 40% of its potential useful life.1,2 There are an estimated 125 million smartphones in “hibernation” across in the UK, highlighting the shockingly unnecessary depletion of the earth’s resources in order to sustain the manufacture of new devices while perfectly adequate tech lies idle in drawers.3
Raylo believes that each device can be enjoyed by a total of three customers over 6-7 years – a lifespan almost 200% longer than the UK average of 2.31 years. To help customers keep devices in great condition, all Raylo phones come with a free eco-friendly case and screen protector.
Raylo is a greener choice, but not one that comes at a cost to the consumer. The Raylo lease model means people pay significantly less than the RRP over a 12 or 24-month term. Customers can also opt for a free upgrade at the end of the term and then the old device is collected, refurbished and leased to the next customer – once a device eventually does reach obsolescence, it’s sustainably recycled by Raylo’s partners.
On the decision to back Raylo, Tosin Agbabiaka, early-stage fintech investor at Octopus Ventures, said:
“The subscription economy is rapidly transforming the way we access products and services – yet the smartphone, an individual’s most valuable device, is still locked behind a bundled, ownership-based model. This means most people are trapped in a buy-and-dispose cycle, with a steep financial and environmental costs.
“Raylo solves these problems by offering access to premium consumer devices at lower, subscription-based prices, helping to widen access to the latest technology. By repurposing its devices at the end of their cycle, Raylo is also the sustainable choice in this market and has built a product loved by its customers – the opportunity here is massive, and we believe that Karl, Richard, and Jinden have the vision and depth of expertise to transform the way we all access our devices.”
The co-founders and leadership team have a strong combination of technology, finance and operations experience, includingGoldman Sachs, Barclays, Carphone Warehouse and Funding Circle, which successfully IPOed in 2018.
Raylo has experienced 10x YoY growth of customers and revenues, and the latest funding round paves the way for further investment in doubling headcount and developing its proprietary technology.
The company will see new hires in both the London and Belfast offices, across product, engineering, data science and operations. Whilst a global roll out is an exciting prospect for the future, sights are firmly set on the £10 billion p.a. UK tech market.
Co-founder and CEO Karl Gilbert said:
“Raylo is the technology powering a world where fewer consumer devices are manufactured and those that are get an extended life through our managed cycle of refurb, reuse and recycle. We are delighted that Octopus Ventures share our vision and are supporting us at this important stage of our growth.”
Gilbert continued: “We believe leasing delivers a fundamentally better experience and value for customers, and a materially more sustainable outcome for all of us. We want to be known for leading the change in how people access consumer tech, and over the next 6-12 months we’ll be expanding both our product range and distribution channels.”
Lou Tricarico, a Managing Director at Macquarie Group commented:
“It’s been fantastic to see Raylo’s growth since we initially invested in 2019. We are very focussed on sustainable device financing at Macquarie and are proud to continue to support the team in this fundraising.”
If all European smartphone users made the transition to a circular ecosystem, like the one Raylo has created, it would save an impressive 8.9 million tonnes of CO2 per annum – this is the equivalent of taking 6.6 million cars off the roads every single year.4
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