Rentivo

“Rethink” can become a buzzword if we truly don’t get the people to change their habits. In Latin America and the Caribbean we are slowly promoting the extended responsibility that the producer has once they incorporate plastics on their products. The baby gear industry is a great example, they have a 85% of plastics and various types of resins that by design and protocols can’t be recycling fully. However, there can be a change in the model. We believe we can change the model of consuming these products for a better and still profitable model of renting. That’s why we create Rentivo a systematic way to connect factories, distributors and users through an integrated platform that it’s based in Circular Economy. We launched in 2019 in Chile and since then hundreds of parents can now get access to rent high-quality products for their kids.

When it comes to the small picture, the problem of plastics is fragmented.The focus is to make them biodegradable or recyclable.  The real problem is the way we over-consume plastic-based products and the lack of responsibility of manufacturers to recycle and post process their goods. We know some types of plastics can last longer than 500 years to degrade and some products are not able to be recycled because they're combined with other polymers. A study from the Inter-American Development Bank shows that only 2% percent of total waste is recycled in Latin America and the Caribbean which gives the relevance to focus on the source of the problem itself, the consumption, the lack of responsibility of distributors to have their products back to their factories for remanufacturing and the lack of reuse based models to make that happen.The baby gear industry combines the use of plastics and fabrics. Although they have made secure and long-lasting products, ideal for 8-10 cycles of use, they are still on the one-time purchase model which just goes for 1 to 2 cycles as the baby grows rapidly.This combined with the increasing demand for new ways of Product As Service rather than one-time purchases that currently are in the market.

On the one hand we have validated through more than 50 deep-dives interviews that parents in Chile do not have options for sustainable consumption according to their budget, time constraints and space limitation. The option to purchase items for their children is the only option that is available in the market to cover with the need for a car seat or a toy. Unfortunately, these items are used for a short time, due to their child growth, and they end up in the trash or at best they are inherited to a second child if they are still functional. That is why, there is more than 92% acceptance and willingness to opt for platforms like Rentivo that gives them access to better quality products than their currently buy options for a reasonable rental price and since it is used only for the time necessary there is not a concern for storage space or time.

To solve the problems of consumption and linear production, our proposal is a service that allows parents to access high quality products at affordable prices through an online subscription and rental model. As it is a technological solution, it requires the identification of the technical requirements for specialized development to a circular economy platform. Since it is a relatively new model, there is a need to adapt the platform to a rental and subscription model. Currently the platforms are made for linear consumption online (e-commerce) but not for scheduled and recurring consumption so the challenges are even greater. As part of our competitive advantage, we will integrate sensors that will optimize the logistics process, product safety (sanitary and structural), inventories, delivery, and post-rental information management. Making it THE platform where manufactures can switch to rental model and increase their income by 3X and users get to pay a fraction of the price with all the advantages and service that comes with a Product As a Service platform.

A baby in the Americas produces ~180 tonnes of CO2-equivalent emissions during the first 3 years of life. Although parents have become more and more aware of climate change, there are no solutions that promote responsible consumption of baby oriented products such as chairs, cradles, toys, etc.  

Our innovation spans along two axis: business model and supply chain. In the business model, we change the linear model of consumption (retail/e-commerse) to circular-economy model where products are reused which as result it gives the parents the opportunity to reduce the carbon footprint of their babies by giving them access to high-quality shared products without compromising the benefits of having a brand new product.  The second axis of innovation is our supply chain which ensures the product sanitary and structural safety, insurance and liability protection, on time delivery and responsible product disposal after the end of its lifecycle. We use a high tech approach to manage our supply chain from an proprietary lifecycle product platform for rentals to automatic systems for sanitization and estructural control of the product. Examples of the latter are an accelerometer-based sensor that ensures that a car-seat has not been engaged in an accident during rental and an automatic sanitization process that includes a robotic UV lamp to ensure our rental are germs and pathogen free. 

To explain the impact of our solution we will be doing a simple mathematical exercise considering two scenarios, the first a baby that buys products from retail stores and the second scenario, a baby that uses products from Rentivo.

 In the first 3 years of life a baby will minimum use a crate, a hanging toy (or any toy) and a stroller.  Considering their combined weight, these articles total to 35kg of plastic which is equivalent to 210kg of CO2 emissions. 

• Without Rentivo, a baby will use these products once in their lifetimes and they will be trashed, hence his/her footprint is 210kg of CO2 equivalent emissions. 

• With Rentivo, these products will be used for 8 cycles and then return to the manufacturer for proper recycling (60% of the plastics will be recycled).  In this scenario, the baby footprint total to 15.75kg of CO2 equivalent emissions. 

From the calculations above, in the worst case, we will be reducing the Carbon footprint in Chile by 58300 tons of CO2 equivalent emissions a year considering we serve only 3700 babies a year. 

1. We are currently serving 41 babies/month totalling to 510 days of rentals per month.

2. In the next year we expect to serve ~1200 babies totalling to 15000 days of rentals in a year. 

3. In 5 years, we expect to be serving ~3070 babies/year. 

Environmental:  Our main metric is the CO2 footprint of a baby that we help reduce in kilograms.  In our 11 months of operation we have already reduced 10000 tons of CO2 equivalent emissions.

Our main goal is to further increase the carbon footprint of our final users (babies).  For this, we’re currently making an agreement with the government of Chile, specifically Caja de los Andes -the social insurance provider-  to include Rentivo in the newborn kit that the institution provides to all the insurers that have a newborn. This kit currently includes a couple of brand new baby products which we will replace with a rental option.  If this agreement succeeds, we’ll be serving 250000 babies a year and reducing their footprint by 1250 tons of CO2. 

Within the next 5 years, we want to partner and certify manufacturers of baby gear to ensure their products will be properly recycled after the end of their life cycle. 

Product liability and insurance are two main challenges of our business model.  Due to the lack of state regulation for rentals, we face a black loop in the law of Chile and in most of the countries in Latam which makes it unclear if the manufacturer or the renter is liable for a product that malfunction and causes harm to the users.  The second challenge is related with insurance of the rentals which need to be insured for damage in shipping to and from the customer an during its use. Current insurance companies don’t provide this specific service. 

We have identified two strategies to overcome the legal gray holes in product liability for rentals:  the first one is an active control of the quality of our products starting by engaging with recognized manufacturers and ensuring product sanitary and structural safety by our proprietary processes.    The second strategy is working with a legal team that understands consumer laws to ensure our terms and conditions are in benefit of our customers and also allow for our financial viability. 

For insurance, we have partnered with Route (route.com), a US based insurance company that provides custom on-demand insurance policies for internet marketplaces operating internationally.  We are in the process of defining the terms of a policy managed by Lloyd’s London which will cover our customers from any damage, product lost or stolen during the rental period.  

In Latin American and the Caribbean the market opportunity has reached a 30 Billion market value in the baby gear sector, and most importantly the demand for sustainable services replacing consumer goods is rapidly increasing +56% from last year. 

We will start our plans to scale to the rest of the region by expanding the network that we already have built in Chile. Since we already have the first agreements with manufacturers and distributors we can connect with the equals partners in each country as well as the subsidiaries on the case of marketing and distribution channels suchs as LATAM PASS or the 4 stars hotels. We will start with Mexico and Ecuador since both have similarities on the demographics and interest points like Chile. 

8 people, 4 co-founders, and 4 contractors

The success as well as the difference relies on the team, we have a solid background of experts as co-founders: Jose, PhD in Robotics & Supply Chain. Sebastian, Master and expert on iOS and Android app development, Agustin, an expert on commercial and sales management , and I, who has expertise in Fundraising and project management. Part of the key of success also comes from the years of expertise that we all have in our areas that goes over 6 years in each case and companies such as Facebook, IBM Watson, BTG Pactual and Startupbootcamp.

We have been connected to the startup world from the very beginning, each of us have had previous roots on being part of startups and product development, which give us the entrepreneurial mindset that it is needed in the ups and downs of the journey that every startup has to go through. 

A  big advantage that we all have is our international network that it’s built in the US, UK, France, Germany, Chile and Ecuador. Despite from all the above, the trust I personally have with every member of the company is a highlight. I have the pleasure to work with them in previous projects which gives a much more efficient workload the passion that is required to to take Rentivo globally.

We are currently working with worldwide-known partners in the circular economy field such as Ellen Macarthur Foundation through DIF (Disrupt Innovation Festival). In November, we were honored to be selected to hold a session regarding rethinking the current lineal model to a rental and subscription model. Rentivo was together with Algramo the only two startups representing Latin America and the Caribbean to be part of an event that has over 1.5 million viewers. In Chile only, we have already partnered with Latam Airlines through their loyalty program catalog, the 3rd largest loyalty program of the world with over 30 Million users. We are part of their selected list of providers. Moreover, since our primary focus is to integrate directly with factories and distributors of the main baby gear brands, we have started in January to have an agreement to access better price conditions and technical support. We are also partnering with 4 stars hotels in Santiago to increase the awareness of the circular economy for parents, especially to travelers. Therefore we believe by winning the rethink plastics award will be the perfect platform to showcase the results and the impact we (startups) and big institutions can make together.

Currently we have 2 business models:

• One time rental with more than 28+ high-quality products and with a retention rate of almost 60%, much higher than the common ecommerce platforms in the region. In this model, we gain a profit every time an item is rented through the platform. We owned the whole stock, hence we can guarantee the quality and availability of the items. Moreover, the products we owned have been qualified to be used more than 8 cycles  -currently the use cycle is 1-2 cycles for 6 months on average for a product bought in any retail marketplace).

• In our testing mode we have a subscription model in Books & Toys: We have over 150+ pre-subscribers in the last 4 months. In this model the parents have a monthly subscription where they pay on average 15 USD every month for a pack of 3-4 books for their kids. The pack is specialized according to the age of the kids which gives an extra value to the parents. In the next 3 years, we expect to increase the habit of reading by 20% in the kids of the region.

We are currently under the support of governmental funds through StartUp Chile and CORFO which has been supporting us since March last year. Our plan is to keep growing organically the 1st quarter of the year to get enough traction and start raising an angel investment or pre-seed round by the end of 2020. In the meantime, we have secured the funds to keep up with the growth and invest in marketing and sales until the end of the year, however we are looking actively to gain more grants that allow us to foster the product development and the add more pilots with corporates.

We believe the way we should rethink plastics has to come from the way we currently behave and consume. Being honored with the award on this challenge will encourage more projects to think out of the box and fully rethink the whole model and have the foresight that it’s needed to overcome the magnitude of plastic waste management.

By being connected with the IDB Group we expect to have the platform that we need to showcase the model we have built and the boost the synergies with more corporations as well as users. Having the board for instance will be a big step towards getting ready for financial rounds as well as have mentors from the ecosystem that help us to navigate this circular economy journey even faster.

Primarily, we have identify 3 organizations that we can partner with:

Ebay: A mentorship program where we can connect with them to cooperate in better ways to have a higher outreach.

The United Nations Environment Programme, which currently has programs and initiatives in markets like Chile and Latin America.

CLOSED LOOP Partners: We are currently seeking venture capital funds to start connecting with investors. They have an exclusive focus on circular economy startups, so we think we will be a great fit.