The Irish co-founded start-up will use the funding to double its workforce and boost its subscription smartphone service.
Raylo, the start-up that lets customers rent their smartphone, has raised $11.5m in Series A funding.
The company was founded in 2019 by Karl Gilbert, Richard Fulton and Jinden Badesha and has offices in London and Belfast.
Raylo said it has seen 10-fold year-over-year growth in both customers and revenue.
The company will use the funding to double its workforce and expand its smartphone subscription service.
The funding round was led by Octopus Ventures. The latest round brings the company’s total funding raise to $40m in equity and debt.
Previous backers include Invest Northern Ireland and TechStart NI as well as Guy Johnson of Carphone Warehouse and the co-founders of Funding Circle.
Raylo wants to take a slice out of the subscription service market, but for hardware rather than streaming services such as Netflix.
Its model allows customers to pay a lower cost than the recommended retail price of a smartphone in order to lease the device for a set contract.
It aims to combat the rising cost of new handsets as well as the environmental considerations of reducing electrical waste.
According to a recent International Data Corporation report, smartphone vendors shipped nearly 346m smartphones during the first quarter of 2021.
And figures published by the European Parliament earlier this year show that e-waste is the fastest growing waste stream in the EU and less than 40pc is recycled.
According to Raylo’s own sustainability report, smartphones are used for only 40pc of their potential lifespan.
Raylo’s model means the use of smartphones is extended as they are refurbished and reused, giving phones “as many lives as possible”.
At the end of a smartphone contract, customers have the option of giving the phone back, swapping it for an upgrade, or keeping it as part of the subscription model or through paying a non-return fee. End-of-life devices are then recycled by Raylo partners.
Raylo isn’t the only player raising funding for its circular economy model. French start-up Back Market, which acts as a marketplace for refurbished electronics, raised $335m in Series D funding earlier this year.