This startup saved ₱275K on capital expenditures by renting laptops instead of purchasing them.
Insight Supply Chain Solutions, a local supply chain startup in the Philippines dedicated to implementing next-gen supply chain solutions to its customers, faced a dilemma when trying to figure out how to support its growing engineering team with top-of-the-line laptops in remote work locations.
With the limited capital of a startup and no dedicated IT lead person, purchasing the equipment outright posed significant financial and operational hurdles, particularly on the accelerated timeline the business demanded. Recognizing that the company’s engineers were reliant on laptops in order to stay productive, the startup explored different alternatives which ultimately led them to acquire 5 MacBook Airs for just 6.6% of market cost.
The first step Insight took was understanding how much they would pay to purchase the equipment outright. Five MacBook Airs at ₱55K each would cost ₱275K upfront.
The company could consider using its capital or leveraging the founder’s personal line of credit. If the company used its capital, it would immediately reduce runway for the startup, limiting their ability to spend on more productive components of the business, like people and other projects.
Alternatively, if the company used the founder’s or other executives’ lines of credit, which some suppliers do offer 0% interest for 12 months, then the executives would be personally at risk and the process would not be scalable beyond just a few devices. The standard outright purchase option of ₱275K is now a hindrance to the company, presenting risk to either the company’s future cash flow or growth and scalability.
Clearly, the startup needed to find a more affordable option than buying outright for ₱275K. They also needed to overcome the hurdle of the absence of an in-house I.T. expert.
Since the founder himself would be forced to manage this procurement process end to end (from sourcing to quoting to paying), he recognized that being able to manage it with ease would provide significant value to the business as well.
In exploring rental options, they explored local technology shops to no avail. Online web competitors seemed out of date and risky with little to no social proof. Insight Supply Chain discovered a local, VC-backed tech startup called TechUp which offers laptop rentals for businesses. TechUp could support their inventory management from start to finish.
The company initiated with a down payment of ₱16.5K to secure the five MacBook Airs, kicking off their contract for 36 months of payments. This proved to be a game-changer for the startup because not only were the devices delivered directly to its employees' doors, it also saved the company critical cash and runway for growth.
In addition, the laptops come with standard warranty in the event of an internal failure. With their extra savings, Insight even opted into accident insurance to cover employee spills or other accidental damage.
"We obtained 5 MacBook Airs with a limited budget, and the devices were even delivered directly to our employees in Cavite, Subic, and Metro Manila"
-Insight Supply Chain.
In conclusion, by leveraging a rental partner for employee devices, Insight Supply Chain paid just 6.6% of the would be costs in the first month with renting. Had the startup opted to outright purchase these devices, they would have paid approximately ₱275K upfront, far more than the savings they enjoyed through renting.
Additionally, this helped the startup free up critical capital for other strategic investments and provided them the ease of management to scale their laptop fleet with evolving business needs.
Need rental laptops for your Philippines-based workforce? Contact TechUp today.
