Berlin-based tech subscription scale-up Grover announces today that it has closed a new asset-backed financing deal, topping up an existing facility with Varengold Bank to a total of €250 million. The additional funding will fuel the next growth phase for the Circular Economy pioneer.
Grover, founded in 2015, is an advocate of the ‘circular economy’, offering a monthly subscription to private customers and businesses to access over 2,000 tech products including smartphones, laptops, virtual reality (VR) gear, and wearables. Grover’s service allows its users to keep, switch, buy, or return products depending on their individual needs, profiting from flexibility and full usage rights at a fraction of the purchase price.
Grover falls under the access over ownership movement, which also allowed companies such as Netflix, AirBnB and Spotify to grow and succeed. Its business model of renting out tech products to several users across their life cycle allows maximum value to be extracted from each product and reduces e-waste. In 2019 alone, Grover recirculated nearly 100 thousand devices, and recorded a 200 percent growth rate in active subscriptions and cash revenue. Now, with a total financing of around €300 million to date and over 100 employees, Grover is one of Germany’s best funded scale-ups. In 2019, Grover founder and CEO Michael Cassau spoke at the EU-Startups Summit, giving insights on how to partner with retail companies.
Its new asset-backed funding deal is an increase of an existing €55 million debt facility with Varengold Bank to a total of €250 million, via a supporting debt investor. The additional funding will be used to expand Grover’s product range and will go toward the purchasing of assets. This allows Grover to respond to growing demand for its service in Germany, Austria and other markets to be launched in 2020. Importantly, Grover will use the capital to further develop its e-mobility category, with the aim of making future-oriented micro-mobility vehicles accessible to the broad public on a flexible, monthly basis.
The funding also supports the expansion of Grover’s cooperation with major electronics retailers. The company is currently present in the online channels of eight leading European electronics retailers and in more than 500 brick-and-mortar stores across Germany. In addition, the company will expand its B2B offering, in order to serve the rapidly rising demand from its business customers.
Michael Cassau, founder and CEO of Grover, says: “This asset-backed financing deal is essential for the expansion of Grover’s business. With Varengold facilitating this financing round, we have a banking partner by our side who firmly believes in our business model and supports our growth. Securing this fresh funding in the three-digit million range proves once again that Grover’s disruptive tech rental model has enormous future potential – for our business partners and for our growing customer base.”
Lukas Diehl, Head of Marketplace Banking at Varengold Bank, adds: “It is important for us to build long-term partnerships by continuously adding value with a portfolio of attractive banking services for customers like Grover. To do this, we sometimes draw on our network of institutional investors. We are very proud to have found a further debt investor to collaborate with to ensure Grover’s long-term growth.”