Lumoid, a four-year-old San Francisco startup which was reportedly partnering with Best Buy to offer try-before-you-buy rental services on products like cameras, audio gear, and fitness trackers, has gone out of business.
Per Recode, company CEO Aarthi Ramamurthy posted to Facebook thanking team members and announcing that “Over the last 4 months, we gradually wound down Lumoid, sold off assets and IP, and helped the team transition as best as we could.” Ramamurthy said she had already transitioned to working at Facebook’s Payments team.
As Recode noted, Lumoid raised several million dollars in venture capital and an additional million in venture debt, as well as secured the partnership with Best Buy in June 2017. At the time, the service was pitched as an experiment to see if retailers could attract customers’ attention while they were merely considering purchasing an item, such as by allowing them to rent an Apple Watch for $50 a week. Here’s how it was supposed to work: Users on the Best Buy website would be able to click a referral link to Lumoid, getting 20 percent of the rental price back in credit. If renters liked the item, Lumoid offered customers the chance to apply the credit towards the purchase of a used product, which could also help Best Buy offload their stocks of open-box items.
The intent was clearly to compete with Amazon, though it wasn’t clear whether consumers were all that interested in a try-before-you-buy service. The whole process also seemed kind of unwieldy, another ding given Amazon Prime’s free two-day shipping and generous returns policy, which usually lets customers send back an item if they hate it anyway.
Best Buy declined to comment on the terms of the deal, or whether it had bought equity in Lumoid as part of the agreement, according to Recode.