Mishaan Ratan, co-founder, CMO and Chief Strategy Officer of online electronics success store Rentoza, discusses what it means to be a first in Africa; to give consumers access to a broad range of daily-use items; and to ensure affordable rates and flexibility.
“As Africa’s first subscription platform for products, Rentoza has created a new way for people to access goods they need or want,” says Mishaan. “We ensure access at affordable rates with very flexible terms.”
What does this mean to consumers? “Essentially, it means that customers can get everyday essential items such as a laptop, phone, microwave, fridge and even your baby strollers and fitness equipment through Rentoza on subscription,” Mishaan says.
“Payment month to month enables access to the product for however long or short a time they choose, with cancellation or upgrade available at any time, with no penalties at all.”
As a fledgling business, Mishaan says Rentoza was one of many start-ups seeking Funding. “We would raise the topic with individuals or firms that showed interest, as you do in the beginning.
“We were speaking to multiple potential funders when the name ‘ProfitShare Partners’ came up and, being a fintech, we thought we’d access them online, take a look at their platform and maybe apply to see how it may work.”
Meeting ProfitShare Partners’ CEO Andrew Maren
Mishaan says that the Rentoza team found the online process simple and speedy. “It took us about ten minutes to get through the online process. So, super simple which is a huge bonus when you’re running a business in start-up mode and don’t have a lot of time to spend online.
“It was by word of mouth that we heard about the fintech firm’s founder Andrew Maren and we were so grateful when he gave us a chance to meet and discuss our business with him.”
The system, Mishaan asserts, was “pretty effective in getting us through the first gate, and thereafter we had a sit-down with Andrew and the PSP team.”
“We told them about the business, explained what we needed the funding for, how the business model works, and got a proposed provisional term sheet from them and then negotiated terms of payment.”
Mishaan says if you have dealt with Andrew, you know he is an entrepreneur and a banking professional. “Andrew was very receptive to the discussion and found our model very interesting. He believed ProfitShare Partners could structure an arrangement that could help us, and that’s how we began a very fruitful relationship.”
The benefit of PSP in your corner
“ProfitShare Partners has impacted our business in many ways. They’ve been a funder from day one, and I’d like to share the backstory,” says Mishaan.
“Being a small business in start-up phase makes finding the right funders and those that can help scale your business very difficult. Once Rentoza received funding from PSP, it laid the foundation for us to begin purchasing the assets we needed to meet the demands of our business,” he says, adding that once the new business started meeting demand, revenue increased constantly.
“The initial portion of the Funding helped us to level up our business. There were the four founders of the business and we were able to employ more people as our business grew.”
Here, Mishaan notes that Rentoza was able to scale at a slightly slower rate, but one that allowed them to target a wider sector of the population and have the capacity to meet this demand.
“The impact and growth was positive from day one and we’ve had a partnership with ProfitShare Partners for the last five years – the whole cycle of our business,” says Mishaan. “They’ve been there from the beginning and seen the business change three times, where we’ve pivoted to where we are now.”
“Rentoza has reviewed the subscription model and at every stage, Andrew and PSP has assisted reinvention through two or three changes. They were there when we needed the funding to level up another 20% to 30%, per our forecast.”
With PSP’s backing, Mishaan says their forecast proved to be even greater as they were able to drive demand and the demand increased the assets. The scale-up turned out to be 50%.
Creating employment, economic inclusion
According to Mishaan, Rentoza’s initial four founder-workers grew to five, then 16, 18, and then 34 people. “We now have around 190 staff members and our really good relationship with PSP has seen them assist us over the last quarter to meet market demand and scale up accordingly.”
With both the Funding and the guidance Rentoza has received from ProfitShare Partners, Mishaan says the future is looking bright. “Any start-up will tell you the hardest part of the SMEs journey is funding. The issues are real and the solutions few. What you need is someone who will engage in a conversation with you – and that’s what we found with ProfitShare Partners.
“Our initial discussion was the first time we’d had talks with any funder to explain our business and our idea. We had been to multiple institutions over the years, but few think outside of the box and put you into the ‘credit and scoring’ model.”
“But having a professional revise the model, call us back and say, ‘This is how we see you’ and ‘how do we overcome this issue’ and ‘what are your plans for this?’ gives you more than Funding – they bring expertise and solutions; plans to help you forecast and grow your business responsibly.”
Responsible business growth for Rentoza, according to Mishaan, includes not only expanding revenue, but growing staff and improving their individual and collective skills sets as the business changes.
“This, too, requires Funding and ProfitShare Partners’ outlook on growth and inclusivity among staff members aligns with our own,” he says.
“It’s also about the right distribution partners and Funding the right sectors of your business. These are the kind of discussions you need to be able to have with a funder to ensure they understand your vision. This makes them more likely to help you deliver a successful plan for each one of the verticals within your business.”
Both Rentoza and ProfitShare Partners understand the importance of SMEs to the economy, nationally and globally, and the massive part played by institutions that make access to capital easier and more valuable – not just with finance, but with guidance and working together as a team.
Says Mishaan: “It’s important for all parties to understand that they’re creating multiple solutions in the market. Growing and supporting expansion for a small business’s journey towards a medium or even large business means supporting people too – and people drive the economy.”
“Given the chance, SMEs may be able to expand to employ lots of people and help people grow,” he asserts. “The way we look at it is that we’ve got a business that started with four of us and is now almost 200 employees strong.
“This means feeding 200 or more families and employing a multitude of youngsters in your business. With youth unemployment at around 67% in South Africa, it is vital that we encourage employment among the youth.”
“Rentoza employs youngsters because they are digital natives and also because if you’re going to have an interesting business that must grow rapidly, you need people who are hungry to learn and earn as well,” says Mishaan.
“With ProfitShare Partners a partner in our business for the last five years, I wouldn’t hesitate to recommend them as funders and professional business partners – something we already do. We know PSP can help these businesses like they’ve helped Rentoza to scale up and expect to be successful into the future,” he concludes.
