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Why did WhatsOnRent Fail?

What Happened to WhatsOnRent & Why Did It Fail?

January 25, 2025

WhatsOnRent was an online rental marketplace founded in September 2015, offering products like home appliances, furniture, and medical equipment. Despite initial success and funding, it shut down in November 2016 due to funding challenges and high operational costs, returning 50% of its seed funding to investors.

What Was WhatsOnRent?

WhatsOnRent

WhatsOnRent was an online rental marketplace offering home appliances, furniture, and medical equipment. Its unique value proposition was promoting rentals over purchases, with a "Try-before-you-Buy" program. Notably, it raised seed funding from prominent investors and returned over 50% of it upon shutting down.

What Happened to WhatsOnRent?

The story of WhatsOnRent is a compelling example of rapid growth followed by an equally swift decline, marked by several key phases:

  • Initial Success and Funding: WhatsOnRent was founded in September 2015 and quickly gained traction by offering a diverse range of rental products, from home appliances to medical equipment. The company secured seed funding from notable investors, which fueled its early growth.
  • Consumer Mindset Challenges: One of the primary obstacles was changing the consumer mindset towards renting instead of buying. Despite the innovative "Try-before-you-Buy" program, convincing customers to adopt this new behavior proved difficult.
  • High Operational Costs: The rental business model came with significant operational expenses, including logistics for delivery and pick-up, as well as maintenance of rented items. These high costs made it challenging to achieve profitability.
  • Funding Difficulties: WhatsOnRent struggled to secure the necessary pre-Series A funding, which was crucial for scaling the business and changing consumer behavior. The inability to raise additional funds ultimately led to its downfall.
  • Closure and Refunds: Realizing the long-term viability issues, the founders decided to shut down operations in November 2016. Impressively, they returned over 50% of the seed funding to their investors, demonstrating a commitment to ethical business practices.

When Did WhatsOnRent Shut Down?

WhatsOnRent shut down its operations by November 14, 2016, as reported by TechCircle. The decision was driven by funding challenges and the difficulty of changing consumer behavior towards renting.

Why Did WhatsOnRent Shut Down?

  1. Inability to Raise Next Round of Funding: WhatsOnRent struggled to secure pre-Series A funding, which was essential for scaling operations and changing consumer behavior. Co-founder Bharat Goyal noted, "We could not see the next round of funding coming. Without that pre-Series A funding of a couple of million dollars, it was not possible."
  2. Consumer Mindset Challenges: The company faced significant hurdles in changing consumer behavior towards renting products. Despite their efforts, convincing customers that renting made more sense than buying proved to be a major obstacle. Goyal stated, "Changing the consumer behavior that renting makes more sense was a big deal."
  3. High Operational Costs: The rental business model came with substantial operational expenses, including logistics for delivery and pick-up, as well as maintenance of rented items. These high costs made it difficult to achieve profitability and sustain the business in the long term.
  4. Limited Market Reach: WhatsOnRent was only operational in Bengaluru, fulfilling 15-20 orders a day with about 1,000 paying customers. This limited market reach restricted their growth potential and made it challenging to scale the business effectively.
  5. Business Model Viability: There was a growing realization that the business model might not be sustainable. Goyal mentioned, "It was also a business decision that this business might not work," indicating doubts about the long-term viability of the rental marketplace.

Lessons Learned from WhatsOnRent's Failure

  • Adaptability: Be prepared to pivot your business model if initial strategies fail to gain traction or prove unsustainable.
  • Consumer Education: Invest in educating consumers about the benefits of your product or service to overcome ingrained behaviors and preferences.
  • Operational Efficiency: Focus on minimizing operational costs to ensure profitability, especially in logistics-heavy business models.
  • Funding Strategy: Secure sufficient funding early on to support scaling efforts and navigate financial uncertainties.
  • Market Expansion: Expand market reach beyond a single location to increase growth potential and customer base.
  • Ethical Practices: Maintain ethical business practices, such as refunding investors, to build trust and credibility.
  • Realistic Goals: Set realistic goals and timelines to avoid overextending resources and facing unsustainable growth pressures.

We Shut Down Startups

WhatsOnRent's journey underscores the complexities and challenges of running a startup, from funding hurdles to operational inefficiencies. When it's time to wind down, Sunset steps in to handle all the legal, tax, and operational burdens, allowing you to focus on your next venture.

Don't let the stress of shutting down hold you back. Book a demo with Sunset today and see how we can make the process seamless and hassle-free.