Raylo, a London-based subscription infrastructure firm, has announced a $41 million funding round and a strategic partnership with electronics giant LG. This dual development will accelerate the company's expansion into new device categories and support its planned entry into the United States. The financing was led by Citibank with continued support from NatWest, signaling strong investor confidence in the company's growth trajectory.
A Strategic Partnership with LG
The new collaboration allows UK consumers to access LG's premium television and audio products through a flexible subscription model called LG Flex. This initiative provides customers with affordable monthly payments and the ability to easily upgrade as new technology becomes available. The service is accessible directly through both the LG and Raylo websites for a seamless user experience.
For LG, this partnership is a strategic move to meet evolving consumer demands for greater choice and flexibility. Christina Sangmi Lee, Head of LG.com, noted that the subscription experience aligns with modern customer expectations. By leveraging Raylo's platform, LG can offer its latest innovations in a more accessible and engaging format, enhancing customer loyalty.
Fuelling Expansion with New Capital
The $41 million capital injection is composed of a $13.6 million equity investment led by Citibank and $27.3 million in debt from NatWest. This funding round establishes Raylo's post-money valuation at £150 million, reflecting its strong market position. The inclusion of a major US bank like Citibank is a crucial step in facilitating the company's international ambitions.
These funds are earmarked for driving continued growth within the UK and financing a strategic launch into the US market planned for late 2026. This latest round brings Raylo's total capital raised to over $246 million, providing a robust foundation for its expansion. The investment underscores the scalability of its subscription infrastructure model and its appeal to major financial institutions.
The Growing Appeal of Subscription Models
According to CEO Karl Gilbert, the electronics industry is shifting from one-time sales toward subscription-first business models. The partnership with LG is a key milestone in this transition, adding another global leader to Raylo's portfolio which includes Apple and Dyson. This trend allows brands to build recurring revenue and deeper customer relationships.
Raylo provides the critical end-to-end infrastructure that enables this shift, offering a platform that manages credit risk, device lifecycle, and financing. This allows brands to implement circular and profitable models without building the complex systems themselves. Raylo thus positions itself as an essential partner for companies looking to innovate their sales channels.
Market Context and Investor Confidence
Raylo's $41 million fundraise stands out in the current European investment landscape for subscription-based startups. It significantly surpasses other recent financings in the sector, positioning the company at the upper end of the market. This suggests capital is concentrating on platforms that empower established brands to adopt recurring revenue models.
The commitment from Citibank, alongside continued backing from NatWest and previous investors like Macquarie, highlights sustained confidence in Raylo's vision. This strong support from leading investors validates the company's ability to scale its model across different categories and markets. It reflects a shared belief in the future of device access as a service.
In conclusion, Raylo's $41 million fundraise and its partnership with LG mark a pivotal moment for the company and the consumer electronics market. These developments provide the capital for international expansion and solidify the growing trend toward subscription-based access over ownership. This strategic move positions Raylo as a key architect in building a more flexible and circular future for technology.