(Bloomberg) -- German startup Everphone GmbH, which lends and refurbishes phones for businesses, has been valued at $170 million in a funding round its founder hopes will put it on the route to an initial public offering. 

The Berlin-based startup, founded in 2016, said it raised $65 million in equity and $135 million in debt in a Series C round led by Cadence Growth Capital, who has become the largest shareholder. Other backers included Phoenix Insurance Company, Deutsche Bank AG and Deutsche Telekom AG. 

Everphone buys thousands of smartphones and lends them to business clients such as Ernst & Young LLP. Those clients later return the handsets to be refurbished and rented out again. Chief Executive Officer and founder Jan Dzulko calls the business model “phone-as-a-service” and reckons it stretches devices’ useful lifespans to about five years from less than three, based on typical leases.

Its valuation is up from about $35 million a year ago. “In three to four years, I would love to try to IPO,” he said.

Climate-conscious customers and investors want to combat the environmental impact of swift electronics upgrade cycles underpinned by resource extraction. That’s led to a spate of so-called circular economy startups like Everphone. Dzulko said his company is partnered with another, eco-friendly phone-maker Fairphone, but it also buys and services phones from industry titans Apple Inc. and Samsung Electronics Co Ltd.

After a roughly 5-year mark, phones are sold on to the consumer market “to give them another life cycle,’ he said. The company currently has 124,000 handsets in circulation with clients, after starting the year with 38,000. 

Everphone said it will use the financing round to expand into the U.S. beyond its current European client base, and buy more phones. It will also hire more staff beyond its current 201.

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