Rentcycle, a San Francisco-based startup that has been dubbed the “OpenTable for product rentals”, announced today that it has raised $1.4 million in seed funding. The round was led by Collaborative Fund, a young seed fund founded by Craig Shapiro that invests in startups focusing on peer-to-peer sharing of resources and creative innovations in business.
A host of other notable VCs and angels participated in the round as well, including Andreessen Horowitz, SV Angel, Founder Collective, and Amicus Capital, as well as angel investors including Max Levchin, co-founder of PayPal and Chairman at Yelp, and Founder of Shopzilla Farhad Mohit.
As part of this infusion of seed capital, Rentcycle is also adding two well-known advisors to its management roster: Netflix Founder Marc Randolph and Chuck Templeton, the founder of the popular restaurant reservation service, OpenTable. (Templeton will also be joining Rentcycle’s board of directors.) According to Rentcycle Co-founder and CEO Tim Hyer, the startup will use the round to ramp up hiring, especially in the area of rockstar engineers.
So what is it about this young startup that has such an impressive list of investors and advisors jazzed to be part of its collective roster? For starters, the product rental industry is an $85 billion space, the CEO tells me, and it happens to be one that is badly in need of an aggregating resource for all-things rental.
It’s for this reason that the startup provides the composite industry (from tools and equipment, party and events to sports and leisure) with a full directory of the many mom-and-pop rental stores currently operating in the U.S.
So, when considering Rentcycle from the consumer’s perspective, the platform is a service that allows one to easily search, compare, and rent anything and everything online — from skis to jackhammers and bouncy houses to designer dresses. It’s all there under one roof. And for the merchant, Rentcycle offers cloud-based management solutions, which not only allow rental businesses to bring their brick and mortar operations online, but also enables them to track their inventory online and manage reservations and payments over the Web.
Rentcycle graduated from Silicon Valley incubator Founder Institute in 2009, and has since gone through several beta launches, with the most recent iteration going live in March of this year. Since March, the startup has already grown to 30K monthly active users, and that’s been with the focus solely on beefing up rental supply and waiting for the demand to come, Hyer said.
After all, in terms of the consumer, at first blush Rentcycle’s value proposition is obvious: For those who may still be feeling the effects of the recession, or for those who may not go skiing enough to make it worth buying a new pair of skis, for example, rental is the optimal way to go. Of course, traditionally, rental businesses — before sites like Netflix and Airbnb blasted onto the main stage — were few and far between.
But consumers have become far more comfortable with paying for access to products and services as an alternative to outright purchasing, and Rentcycle could very well find itself on the crest of that new wave, as it seeks to become the all-in-one rental resource for all stripes of digital commerce. Definitely one to watch.
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