Insurtech startup TheGuarantors raises $50M

Provider of lease guarantees and security deposit alternatives says revenue tripled last year

TheGuarantors CEO Julien Bonneville 
TheGuarantors CEO Julien Bonneville

TheGuarantors, a startup that offers a security deposit alternative and lease guarantees to cash-strapped renters, raised $50 million in Series C funding.

The raise, led by Portage Ventures, follows the New York-based startup’s $15 million Series B in 2019 and brings its total equity funding to $77 million. The company did not disclose a valuation following the round, which was announced Monday.

A handful of “insurtech” startups offer alternatives to security deposits — allowing renters to pay in installments rather than one up-front sum — as well as flexible rent payment plans. But TheGuarantors says its lease guarantee offering, which covers rent for the duration of a lease, helped it grow its revenue threefold last year.

It expects to triple its revenue again this year in certain markets — though it didn’t identify those markets or disclose actual figures — as rising rents strain tenants’ budgets. The median asking rent for a two-bedroom apartment in the 50 largest U.S. metros has increased 22 percent in the last two years, according to data from

“We’re actually benefiting from the increasing rents,” founder and CEO Julien Bonneville said. “We’re a little bit antifragile, in that sense.”

Kensington Capital Partners, Arch Capital Group and Roosh Ventures also participated in the Series C, alongside existing investors including Alven, a Parisian venture capital fund.

Unlike competitors such as Rhino and Jetty, who market directly to renters, TheGuarantors relies on its 1,000-plus landlord partners to distribute its products in a “B2B2C” — business to business to consumer — model. Those partners, which include large REITs like Equity Residential, offer TheGuarantors’ two core products as a “financial amenity” to prospective tenants who apply but fail to secure a rental because they do not meet income or credit score requirements.

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TheGuarantors essentially assumes the risk of these tenants from the landlord — a risk it says it is able to mitigate by using AI to set rates for its services, factoring in variables like a prospective renter’s education and the local unemployment level.

The startup further dilutes its risk through partnerships with insurance carriers, including its own in-house licensed insurance company — making it the first venture-backed company to insure its own risk, it says.

Renters shoulder all of the costs, which can be substantial. TheGuarantors charges a 10 to 20 percent premium on the value of the security deposit for that service, and anywhere from 5 to 9 percent of annual rent for its lease guarantee offering.

Insurtech startups are facing headwinds as private market valuations have come down significantly in recent months. Funding for those firms fell 58 percent year-over-year in the first quarter — the largest drop of any category within fintech, according to CB Insights.

“The world has changed quite a lot over the last nine months,” Bonneville said.

Launched in 2015, TheGuarantors has 160 employees and operates in 49 states. It said it will use the new funding to quadruple its engineering team and hire for its product, sales and marketing teams.

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