TheGuarantors, a leading insurtech provider for the real estate rental industry, announced the successful completion of Series B funding totaling $15 million, which makes their total funding amount $27M.
The company will use the funding to expand its existing platform nationwide and to launch its new product for the commercial real estate market. The new offering, called Securiti, acts as a financing tool for tenant companies to replace traditional office security deposits at around half the cost of its alternatives. As the first product of its kind in the office real estate market, it significantly improves cash position for tenants to put to growth, while offering landlords enhanced protection.
The Series B round was led by Global Founders Capital, a global venture capital firm that has previously invested in companies such as Slack, Facebook, and LinkedIn. Most of the Series A investors, including White Star Capital, Alven Capital, and Partech, participated in the round, demonstrating their ongoing conviction towards the company and the space. The round also comprised an array of top players from the insurance and real estate industries, including Silvertech Ventures.
Hugues de Braucourt from Global Founders Capital notes, “With their residential offerings, TheGuarantors have shown ability to create innovative products that have a strong market fit. By venturing into the commercial space – with larger and longer leases – their Securiti offering represents a huge opportunity for growth. We’re trusting them to execute based on their past success and are thrilled to continue our support.”
Securiti: a revolutionary product for office tenants
Traditional office security deposits are very capital intensive for tenants, often 4-12 months of rent. Securiti, tailored to the office real estate industry, allows tenants to replace their standard security deposit for a small annual fee, while providing landlords with desired protection. It can be used on both new and existing leases, which allows all tenants to unfreeze capital and finance new projects.
TheGuarantors have partnered with Chubb, the world’s largest publicly traded property and casualty insurer, to back the policies. The company estimates that over $150B of applicable security deposits are currently frozen in commercial leases in the US alone.
“Security deposits are often a point of friction in lease negotiations,” says Tal Kerret, the President of Silverstein Properties. “With Securiti, TheGuarantors have created a solution that benefits everyone: tenants have an attractive alternative to costly security deposits and landlords get highly liquid, bankruptcy remote protection from a top provider like Chubb.”
Expansion: new territory and continued success
TheGuarantors residential platform, launched in New York in 2016, saw success early on, reaching profitability after just a few months. While it started off as a single product platform offering Lease Guarantee, the platform has quickly scaled with the inclusion of two additional key offerings, completely free to landlords, helping them mitigate all of their tenant-related risks. Landlords and property managers across the country have enjoyed using the platform, which is now activated in nearly 300,000 units across 40 states, including California.
Given the financial and operational impact that landlord partners have seen in TheGuarantors’ core markets, landlords and property managers are expanding their use of the platform across nationwide portfolios. Marc Kaplan, Executive Managing Director from FirstService Residential, a residential property management company active across North America adds, “A significant factor that has led to our success has been the ability to keep vacancy rates low, while accepting the right applicants. This is especially helpful with new lease-ups. TheGuarantors provide excellent products and exceptional customer service. We are proud to call them our partner and look forward to more success in the future.”
Matt Berenson, Vice President Asset Management at Silverstein Properties adds, “We were very eager to work with TheGuarantors because of their ability to seamlessly integrate with property management workflows and existing systems to clearly address various landlord needs. They have built a robust risk management platform with an impressive track record – we look forward to their continued improvements of operational efficiency in the commercial and residential space.”
“We are excited to reach this important funding milestone,” said founder and CEO Julien Bonneville. “Given our strong success in New York City, we have worked over the past year to help landlords in competitive real estate markets like Boston, DC, Chicago, LA, and Dallas increase NOI and reduce all tenant risks. Now that we are established among the residential real estate community, we want to continue to provide solutions by introducing Securiti. We are proud to have created a product that alleviates leasing hurdles for all members of the office rental market.”
Source: Company Press Release