Raylo Group Limited Research Update
More proof that direct-to-consumer tech rental can have a place in the sector...
My last Raylo Group Limited (11554120) research update1 was a few months behind the filing schedule as I caught up with things last October. Happy to be more timely and provide an update on their FY2024 filing which was lodged on 30/06/2025. This time around though, I also need to refer to the Raylo Holding Limited (14477387) accounts as well because a few important data points have moved. So, on the heels of Grover’s woes2, let’s dive in and have a look at the latest…
Recap
Despite the working capital intensity and profit lag, I like the rental business model. From a consumer perspective there’s no big cash outlay, payments are regular and don’t change during the contract life, there are simple return and upgrade options, and the rental firm looks after the second or third lives of the device. It all fits perfectly within the Circular Economy ethos. Raylo embarked on this mission in 2018 and have been developing their capabilities since. In addition to offering their rentals direct-to-consumer, RayloPay was launched in 2021 which I think, allows their platform to operate in a B2B2C model. Why spend your own marketing dollars when you can spend someone else’s?
Just a few other points of order. First, recall that in the last filing, revenue dropped due to recognising income directly from consumer agreements rather than from selling off the receivables. Second, I am assuming that income from RayloPay has prompted a change in the subscriber metrics meaning the KPI probably makes more sense at the holding company rather the operating company level. There are few other consumer focused technology rental companies operating with any scale which makes comparisons difficult. However, at £30.4m in annually recurring revenue (ARR) it feels like they’re pushing beyond start-up curiosity into scale-up territory.
Performance
Raylo posted £27.9m revenue in FY2024 increasing 42% over their previous year’s total of £19.6m. All £26.0m of rental revenues now come directly from consumer hire agreements as opposed to 81% in FY2023 with the remainder coming from the sale of customer receivables. This now feels far cleaner and has likely been enabled by enough historical data to tighten up underwriting and improve risk management. Asset sales amounted to £1.9m, up from £1.4m previously.