A London-based start-up that wants to change the future of ownership has raised $10 million (£7.15 million) in Series A funding.
The platform has been such a success that some lenders are earning up to $10,000 (£7,150) a month in renting income. One user, Emmanuel Ibitomisin, told the Standard he now makes money from renting camera equipment on Fat lama than his day job, meaning he can now work part-time and focus on other creative passions.
“I can make my equipment ‘work for me’ rather than just have dust piling up on it,” he said.
This is all helped by Fat Lama’s insurance policy, which insures every rental up to $30,000, making renting users’ items risk-free. The start-up’s risk profiling technology allows anyone to rent out anything to someone else, anywhere in the world, without fear of it being scratched or broken.
Chaz Englander, Fat Lama’s CEO, said the team is ecstatic with the fundraising results and wants to use the money to expand into the US, where it has been growing rapidly since a soft launch earlier this year.
“A lot of our business to date has been replacing existing renting behaviour, replacing purchasing patterns where people would otherwise have rented,” he told the Standard. “But the aspect that is growing the fastest is people renting an item when otherwise they would have bought it. It’s starting to alter how people buy things.”
Fat Lama started in late 2016 before the founding team moved to Silicon Valley last year to take part in the Y-Combinator accelerator programme, one of the US's biggest start-up programmes. After moving back to London in August, Englander says Fat Lama is going to remain firmly put in the UK capital.
“Fat Lama’s HQ will be in London. There’s a lot of incredibly talented people in Europe. And, it’s much less competitive than in Silicon Valley,” he said.
The recent funding round for Fat Lama saw venture capital firms including Atomico and a new firm Blossom Capital, which led the round, invest money into the start-up.
This was actually the first investment Blossom has made since it launched earlier this year, with ex-Index Ventures’ Ophelia Brown at the helm.
For Brown, Fat Lama’s mission to change how people think about ownership was behind the reason for Blossom’s investment.
“They are mission-driven founders who believe there is too much waste in what we own and buy today,” Brown told the Standard. “Airbnb and Uber are doing this for renting homes and cars. Fat Lama is the next extension of that.”
And if Fat Lama wants to achieve Englander’s mission to be the next UK unicorn, that's a start-up valued at over $1bn, then having a company like Blossom Capital behind it is a good thing.
“We’re building a concentrated portfolio so we will only work with a certain number of founders and teams at a time,” explained Brown. “We’re incredibly thoughtful about each investment that we make, asking questions like: 'is the market opportunity large enough to sustain the company to really become $5 billion or $10 billion+ worth in value?'”
Brown says Blossom’s partners will work alongside the founders to help them to scale and grow, on topics such as hiring new talent, strategic discussions, and future fundraising rounds.
And does Fat Lama have the potential to get to unicorn status?
“Absolutely,” said Brown.