# By Rotation Financial Model

Peer-to-peer social fashion rental marketplace connecting lenders and renters of designer items via a mobile app.

- Canonical: https://finamodel.com/startups/by-rotation
- Excel download: https://finamodel.com/startup-models/by-rotation.xlsx
- Category: Marketplace
- Model type: Marketplace / GMV
- Funding round: Seed
- Funding: $3M
- Founded: 2022
- Geography: UK (London-centric; Marylebone pop-up, Page8 hotel partnership UK).
- Customer: B2C

## About the company

By Rotation is a peer-to-peer fashion-rental marketplace where members list, rent, and resell designer items through an app. The inventory remains with lenders, giving the platform a circular-fashion proposition without the inventory risk of a traditional rental operator.

The research records more than 250,000 active app users, 20,000 listed designer items, and a highly engaged audience. Revenue comes from commission on rentals and resale transactions, with partnerships and community events providing additional but less certain commercial opportunities.

The financial model builds GMV from active lenders, listings, rental frequency, daily price, and rental duration. A marketplace take rate produces net revenue, while resale is modeled as a second transaction stream. Payment processing, trust and safety, marketing, and lender liquidity determine contribution margin and the pace of marketplace growth.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

- Social fashion rental app (iOS, Android, web) with 20,000+ designer items listed.
- Users list items, set availability calendars, and receive automatic payments to bank; renters browse, message lenders, and book for specific dates up to 12 months ahead.
- Secondary resale channel ("list for rental or for sale").
- Positioned as sustainable alternative to fast fashion; circular, no inventory risk.
- Physical touchpoints: branded pop-up spaces and community events to drive app growth.
- Featured as Apple App Store "App of the Day" 3+ times; 4.7-star rating, 410 ratings.

## Revenue model

- Platform takes a commission on each rental transaction (typical P2P marketplace model); exact take rate not stated in deck.
- Rental pricing visible in app UI: example £10/day with a minimum 3-day booking (= ~£30 minimum transaction).
- Secondary revenue from item resale transactions on the platform.
- Potential B2B / partnership revenue (hotel concierge service with Page8; brand event sponsorship with Caudalie, Guerlain, etc.) - not quantified.
- Take rate / commission % not disclosed in deck.

## Traction & metrics

- 250K+ active app users
- 85% of users are actively renting
- 20,000+ designer items listed
- 1.2M website page views (last 12 months)
- 600K+ unique website users (last 12 months)
- 200K newsletter subscribers
- 140K+ social media followers
- Listing category mix (pie chart): ~50% / 20% / 10% across item categories (exact category labels unclear from image, but three segments visible)
- Audience: 95% female, 61% aged 25–34
- Community lender earning example: £7,000+ earned by one user
- No revenue, GMV, or growth rate figures disclosed.

## Competition / moat

Not explicitly positioned vs. competitors in deck. Implied moat:
- Community and social graph (follow friends, reviews, in-app messaging).
- Brand / press recognition: Forbes, Vogue Business, BBC, Evening Standard, Refinery29.
- App Store credibility (App of the Day ×3, 4.7 rating).
- Partnerships with Bumble, Westfield, Howard de Walden Estate, luxury brands.
- Physical pop-up/event community loop driving app stickiness.

## Team & funding ask / use of funds

- Eshita - Founder
- Vlad - Chief Technology Officer
- Maruta - Marketing Manager
- Niki - Junior Community Manager

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## Recommended financial model

- **Archetype + why:** P2P marketplace GMV model. Revenue is derived as (GMV × take rate); GMV is the primary driver, built bottom-up from active lenders × avg. listings per lender × rental frequency × avg. daily rate × avg. rental duration. Resale GMV is a secondary stream. Fits standard marketplace mechanics; no inventory, so gross margin structure is simple (net revenue after payment processing).

- **Forecast horizon & granularity:** 3 years monthly (Year 1–2 monthly, Year 3 can collapse to quarterly); early-stage with limited disclosed financials warrants monthly for cash burn visibility.

- **Key drivers & assumptions:**

| Driver | Value / Source |
| -- | -- |
| Active app users (base) | 250,000 |
| % actively renting (utilisation) | 85% |
| Active renters (base) | ~212,500 |
| Avg. rental transactions per active renter per month | 0.5–1.0; fashion rental is occasion-driven, not weekly |
| Avg. rental value (ARV) | £40–£60/transaction; proxy from £10/day × 3-day min with expected average above minimum |
| Platform take rate (rental) | 15–20%; benchmark against Fat Llama, Hurr Collective (15–17%) |
| Platform take rate (resale) | 10–15%; lower than rental, more commoditised |
| Resale GMV as % of rental GMV | 10–15%; secondary channel per deck positioning |
| Active user growth (MoM) | 3–5% early months, decelerating to 1–2% by Year 3 |
| Listings (base) | 20,000+ |
| Avg. daily rental rate | £10–£20 (£10/day shown as example floor) |
| Payment processing cost | 2.5–3% of GMV (Stripe/standard) |
| CAC | £5–£15 (social/community-led; heavy organic/press-driven) |
| Gross margin (net revenue – processing) | ~80–85% after payment costs |
| Headcount cost | 4 FTEs currently; model should include hiring plan for sales/ops |
| Community events / pop-up cost | line-item required; not quantified in deck |

- **Scenarios (Base / Bull / Bear - which variables flex):**
  - Base: Active user growth at 2.5% MoM, take rate 17%, ARV £50, 0.7 transactions/renter/month.
  - Bull: Faster user growth (4% MoM), geographic expansion to US/EU, B2B partnership revenue materialises.
  - Bear: User growth stalls at 1% MoM (market saturation / competitive entry), take rate pressure to 12%, lower rental frequency (0.4 tx/renter/month).

- **Required sheets / outputs:**
  1. Assumptions dashboard (all toggleable drivers)
  2. GMV build (renters × frequency × ARV, split rental vs. resale)
  3. Revenue & gross profit (GMV × take rate, less payment processing)
  4. Headcount & operating expense plan
  5. P&L summary (monthly, Year 1–3)
  6. Cash flow & runway (critical: burn rate vs. undisclosed raise)
  7. KPI summary (active users, GMV, net revenue, take rate, transactions)

## Frequently asked questions

### Is the By Rotation financial model free?

Yes. The By Rotation model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.