TheGuarantors, a New York based insurtech provider for the real estate industry, announced it has raised $15 million in Series B funding. Including this round, TheGuarantors has raised a total of $27 million.
This round of funding was led by Global Founders Capital. And most of the Series A investors like White Star Capital, Alven Capital, Partech, and Silvertech Ventures also participated in this round. With this funding round, TheGuarantors will be expanding its existing platform nationwide and launch its new product for the commercial real estate market.
This product is called Securiti and it works as a tool for tenant companies to replace traditional office security deposits at about half the cost of alternatives. Plus TheGuarantors significantly improves cash position for tenants to put to growth and it offers landlords enhanced protection.
“We are excited to reach this important funding milestone,” said TheGuarantors 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.”
One of the problems with traditional office security deposits is that they are very capital intensive for tenants and often involve 4-12 months of rent. Securiti allows tenants to replace their standard security deposit for a small annual fee while landlords are provided with desired protection. And it can be used on both new and existing leases, which allows tenants to unfreeze capital and finance new projects.
“With their residential offerings, TheGuarantors have shown ability to create innovative products that have a strong market fit,” said Global Founders Capital Hugues de Braucourt. “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.”
To back its policies, TheGuarantors partnered with Chubb — which is the world’s largest publicly traded property and casualty insurer. And the company estimates that more than $150 billion of applicable security deposits are currently frozen in commercial leases in the U.S. alone.
“Security deposits are often a point of friction in lease negotiations,” noted Silverstein Properties president Tal Kerret. “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.” Silverstein Properties’ VP of Asset Management Matt Berenson also added that they were eager to work with TheGuarantors because of their ability to integrate with property management workflows and existing systems.
TheGuarantors’ residential platform launched in New York in 2016 and saw success early on. And it reached profitability after just a few months. This started off as a single product platform offering Lease Guarantee, the platform quickly scaled with the inclusion of two more key offerings completely free to landlords as it helps them mitigate all of their tenant-related risks. Landlords and property managers have been utilizing the platform in nearly 300,000 units across 40 states, including California.
“A significant factor that has led to our success has been the ability to keep vacancy rates low, while accepting the right applicants,” explained Marc Kaplan, the executive managing director from FirstService Residential — which is a residential property management company active across North America. “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.”
