The concept of usership versus ownership is more prominent than ever as a consumer electronics rental startup just raised $250 million in asset-backed funding. Grover — a German company that provides subscribers with consumer electronics — will leverage the new funds to expand its presence in the U.S.
The funding, provided by London-based Fasanara Capital, will be specifically used to supply Grover’s U.S. market with additional high-demand consumer electronics, SUBTA confirmed.
“The funds enable Grover to expand its U.S. portfolio; increasing the quantities, categories, and product selection we’re able to offer our subscribers,” said Andrew Draft, Grover’s VP and General Manager in the U.S.
Read on to learn more about Grover’s growing presence in the U.S. and the rising shift from ownership to usership.
$250 Million Buys a Lot of Consumer Electronics
Grover will take the $250 million and use it to purchase additional consumer electronics to provide its U.S. customers with more options to choose from, such as virtual reality headsets and electronic scooters.
The company’s consumer electronics library currently has 300,000 devices with the potential to reach 1.5 million with the new funding, SUBTA confirmed. It will also test a new subscription model in Germany: three devices for a monthly subscription of $110, according to Business Insider.
Grover’s mission is to “create the most innovative ways for everyone — both private customers and businesses — to get the tech they want.” Launched in 2015 overseas, the company has grown to reach more than $55 million in revenue in September 2020. Fasanara Capital isn’t the only asset-backed facility to fund the company; Grover has a financing volume of more than $1 billion and is one of Germany’s “best-funded scale ups.”
Fasanara Capital’s investment accelerates Grover’s mission to provide its customers with the best technology in an easy and flexible way, according to Draft.
Grover’s Expansion in the U.S.
After predominantly serving European customers for six years and becoming the continent’s leader in the consumer electronics rental market — with more than 1 million users, SUBTA confirmed — Grover officially entered the U.S. market in September 2021.
“We know what customers look for; we have years of data on their rental behavior and preferences,” said CEO Michael Cassau in an interview.
“We have also built up a complex tech rental ecosystem, including category management, financial fraud and risk management, marketing and distribution, subscription management, fulfillment, refurbishment and reselling processes, as well as a best-in-class user interface and user experience,” the CEO added.
Grover’s vast subscription ecosystem is the pillar of its business model; its deep knowledge and understanding of consumer electronics has been key to its success.
The company witnessed a 150% increase in revenue in 2020 amidst the Covid-19 pandemic, according to the press release announcing its U.S. launch. Its massive success in the European market is a stepping stone for achieving the same in the U.S. In fact, Grover has already seen rapid growth in the American market and surpassed its target subscriber count since launching, company officials told SUBTA.
Grover also appointed Draft as the U.S. General Manager of Grover during the launch. He was previously Head of Regional Midwest Corporate Partnerships at Uber Eats and General Manager of Postmates. Draft brings in years of e-commerce experience, according to the press release, and sees distinct similarities between Grover’s business model and other popular subscription services, such as Spotify, Netflix, AirBnB, and Rent the Runway, he told SUBTA.
“When it comes to consumer electronics, renting the latest and greatest technology should be no different,” Draft said. “And that’s why Grover is now here in the U.S. We believe American consumers understand, as a concept, that flexible access over ownership is a more practical way to consume tech.”
Consumer Electronics Rentals Are Convenient
Renting consumer electronics coincides with changing consumer behaviors.
Practicality ranks number one on a customer’s wish list when considering a product or service, said Jeremy King, CEO and Founder of Attest, at SubSummit 2021. Customers are seeking usefulness in their purchases rather than luxury or indulgence.
Grover’s consumer electronics rental service is a “pay-as-you-use” system, Cassau explained to Business Insider, which falls in line with what consumers are looking for. Zuora’s data shows that more than 70% of consumers want to pay only for what they use and how long they use without a flat fee.
“Our belief is that, for many things, including tech products, the long-term trend is short-term, non-committal use and the proliferation of access-over-ownership,” said Cassau.
Key Takeaways:
- Grover, a consumer electronics rental service, received $250 million in funding from Fasanara Capital.
- Grover will use the funding to purchase additional consumer electronics for its U.S. customers, potentially adding more than 1 million devices to its product library.
- The company launched in the U.S. in September 2021 amidst the shift in consumer behavior from ownership to usership.
- “Our belief is that, for many things, including tech products, the long-term trend is short-term, non-committal use and the proliferation of access-over-ownership,” said Michael Cassau, CEO of Grover.
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