This is a vote for blended financing in subscription hardware because Raylo is now credible enough to scale with bank debt, not just equity.
UK-based Raylo has closed a £30m (EUR 23.62 million) growth funding round combining £10m of equity led by Citibank and £20m of debt financing from NatWest, according to Finsmes. NatWest, an existing backer, provided the debt component, signalling continued confidence in Raylo’s underwriting and unit economics.
Raylo provides subscription infrastructure for consumer electronics brands including LG, Dyson, PlayStation and Apple. The platform enables “circular” models by bundling credit decisioning, logistics and lifecycle management so brands can offer devices on subscription rather than outright sale.
Why the structure matters
The mix of equity and debt is the story. Subscription and hardware-as-a-service models can be capital-intensive, particularly where the provider finances device inventory and carries residual value risk. Raylo’s ability to raise a meaningful debt tranche from a major UK bank points to a business that has moved beyond early-stage experimentation into a more financeable operating model.
Three details stand out:
- Citibank led the equity portion of the round, joining the cap table as Raylo pushes beyond the UK. Bank-led equity is unusual in many venture-backed stories, but here it fits: Raylo sits at the intersection of consumer finance, payments-like infrastructure and asset-backed subscription economics.
- NatWest funded £20m of debt, and it is not a first-touch relationship. Repeat participation matters in credit, where continuity often reflects comfort with performance data and controls.
- Raylo is explicitly using the debt for growth and expansion, with NatWest’s debt supporting UK growth and a planned US launch.
A business model that rewards execution
Raylo’s proposition is operational as much as financial. It helps brands offer subscriptions while handling credit, returns, refurbishment and end-of-life outcomes. Done well, that reduces friction for brands and makes recurring revenue more viable in categories where consumers are price-sensitive and product cycles are fast.
The company is positioned in the circular economy and hardware-as-a-service space, which continues to attract strategic attention as brands look for ways to defend margins, improve retention and meet sustainability goals.
Raylo has also expanded beyond phones into categories such as TVs and audio, widening the addressable market and increasing the scope for brand partnerships. The company has flagged a US launch in H2 2026.
Funding trajectory: from equity-heavy to scalable debt
Raylo’s total funding raised now exceeds £180m, with prior rounds including equity from Macquarie and others. The new round underlines a transition from equity-only growth capital toward a pragmatic mix that can scale with the balance sheet.
For Raylo, debt is not just cheaper capital. It is a strategic enabler for a model where financing capacity can become a competitive moat. For partners, particularly large consumer electronics brands, the presence of institutions like Citibank and NatWest can serve as third-party validation of the platform’s financial position and governance.
Risks to watch
Blended financing can accelerate growth, but it also tightens the execution bar:
- Credit and residual value risk sit at the centre of the model. Any deterioration in consumer repayment behaviour or device resale values can hit returns.
- Operational complexity increases as categories broaden and geographies expand. Logistics and refurbishment performance are not optional in circular models.
- US expansion can be capital-hungry and regulation-heavy, particularly where consumer credit and servicing standards differ from the UK.
What happens next
The round positions Raylo to deepen UK penetration while preparing for international expansion. Just as importantly, it signals that subscription infrastructure for electronics is reaching a stage where mainstream lenders will underwrite growth. That is a meaningful marker for the sector, and a clear advantage for operators that can demonstrate repeatable underwriting and disciplined lifecycle management.