Tech rental subscription service Raylo clicks on £30m fundraising

A consumer tech rental service which has struck partnerships with Apple, Dyson and Sony’s PlayStation brand has landed £30m in new financial backing and an alliance with LG, the Korean electronics giant.

Sky News has learnt that Raylo, which was founded in 2018, will announce on Tuesday that the American financial services giant Citibank has become a shareholder in the business.

Citibank has led a £10m equity injection in the business, while Raylo has also secured an additional £20m of debt financing from NatWest Group, the high street lender.

The funding round values Raylo at £150m on a post-money basis, according to the company.

It takes the total amount of debt and equity funding raised by the company to more than £180m, and is aimed at helping it prepare to launch in the US in the second half of the year.

Raylo’s new partnership with LG, which will allow UK customers to access premium TV and audio products, underlines the British company’s conviction that both consumers and multinational tech brands are shifting towards subscription-based models.

“Electronics brands are increasingly moving beyond one-time sales and toward subscription-first models,” Karl Gilbert, Raylo co-founder and chief executive, said.

“Our partnership with LG marks a key step in that transition, delivering clear value for both electronics brands and customers whilst expanding our category offering with a true global leader.

“As we prepare for global expansion, this momentum reflects strong confidence from leading brands and investors in our ability to scale Raylo’s subscription model across categories and markets.”

Raylo’s other financing partners include Macquarie and Channel 4 Ventures, which has struck a series of media-for-equity deals.