Germany’s stable of unicorns can count one more among its ranks after consumer tech subscription platform Grover raised $330m in Series C funding.
The Berlin-based company rents out electronics like computers, games consoles and smartphones, which are refurbished and rented again to new users. Its circular economy model aims to reduce the number of electronic devices that are left languishing in drawers — or worse, taken to the landfill. In 2019, electronic waste hit a record high at 53.6m metric tonnes.
The round consists of $110m in equity led by Energy Impact Partners, an investment firm backing sustainable startups, and $220m in debt financing from Fasanara Capital, an alternative asset manager based in London. Debt financing can be useful for companies that need to purchase a lot of inventory up front.
The concept of renting rather than owning is extremely popular right now, especially among younger generations, as people have “less attachment to things” these days, Grover’s founder and CEO Michael Cassau tells Sifted.
In the 80s, people brought one big TV and kept it for 10 years, but these relationships have long gone
“In the 80s, people brought one big TV and kept it for 10 years, but these relationships have long gone. Now, people prefer to tap into things when they need them, pay for it, and when it ceases to be useful, they let it go.”
The “rent-not-buy” trend is spreading to other sectors too. There are car subscription services like Feather, bike subscriptions like Swapfiets and fashion rental offerings, such as the US-based unicorn Rent the Runway. In the rented electronics arena, there’s Berlin-based Everphone which grabbed $200m in December last year.
Grover currently has 2m registered users, 500k active subscribers and 250k active customers, who are mainly aged 18-34 years.
Refurbish and resell
Grover’s platform works like so: customers choose an item, pick the desired length of the subscription (which can be anywhere from 1-18 months to begin with, or more if they ask to extend it), and get the item delivered to them.
When customers are done with the item, they can send it back for free in the post. If they break or damage the device, Grover covers 90% of the cost.
Cassau says the benefit of Grover is threefold. The model “simplifies access" to gadgets that people need from week to week but might not want to buy.
It’s flexible. Instead of purchasing an item and having “five years of financing attached to it,” customers can choose a subscription that works for them, and end it when they want.
And it’s cheaper than purchasing a brand new product. Cassau says the cost of a month’s rental is roughly 3-4% of the item’s total purchase price.
Grover helps the environment too, as it rents items, refurbishes them and rents them out again and again while maximising their lifespan. On average, devices rented by Grover last for four years and are used by four different people in that time. The record from Grover’s collection is a GoPro that has been circulated 27 times.
“If every product were circulated as often as that GoPro, we would reduce global e-waste by a factor of 30,” says Cassau.
Grover operates in Germany, Austria, Spain, the Netherlands and, most recently, the USA. Having opened a base in Miami in 2021, Grover plans to expand further into the country this year and, as a first step, will hire over100 people to join the team there.
“The US is an interesting market for us. It’s fairly homogenous, it’s large, but it's also a trendsetting market, where people are drowning in credit cards and too many credit options,” says Cassau. “We believe that we can provide some help and alleviation for the US consumer.”
Grover currently has 450 employees, and wants to double down in the markets where it is currently present. It’s also looking to expand its product range: going deeper into embedded finance and experimenting with areas such as emobility.