TheGuarantors raises $50 million to streamline the apartment rental process by removing guarantees and security deposits from the equation
Margaret R. Seaton
6 min read
The median monthly rent for an apartment in Manhattan has risen to $3,700; most property managers and owners have a 40x annual income requirement, which means potential tenants should earn at least $148,000 per year with a significant credit history. This makes securing an apartment unattainable for many, even if they are otherwise qualified, especially expats, students, recent graduates and entrepreneurs. Guarantors is an insurtech solution where the company serves as a co-signer, guaranteeing payment to owners for a small fee. The company also offers a security deposit product where tenants don’t have to keep thousands locked in an escrow account. In an extremely tight housing market, TheGuarantors is responding to the needs of tenants by giving them more options for which they are eligible and property managers by reducing risk through guaranteed payments. The company has provided more than $1.5 billion in total coverage since its inception, simplifying the 22-day rental process for a property, and coverage is available in 49 states, available for properties from property managers and developers such as Brookfield, Equity Residential, Tishman Speyer, Rockrose and Silverstein properties. Despite market turmoil due to COVID, TheGuarantors was able to triple its revenue in 2021.
Alley Watch met the CEO and co-founder of TheGuarantors Julien Bonneville to learn more about the company, the company’s strategic plans, the latest round of funding, which brings the total funding raised to $76.7 million, and much more…
Who were your investors and how much did you raise?
We raised $50 million in a Series C equity funding round, led by Portage Companiesjoined by Kensington Capital Partners, Arch Capital Group Ltd., Roosh Ventures, as well as returning investors, including Alven. This will allow us to build several new products and increase the size of the teams that will enable our future growth.
Tell us about the product or service offered by TheGuarantors.
Launched in 2015, we strive to improve the financial lives of the millions of US households who rent their homes by making renting more accessible and affordable.
We have two flagship products that help create a smart, fair and human rental experience for customers. The Rental Guarantee gives tenants access to accommodations they might not otherwise be entitled to, and our Security Deposit Replacement acts as a direct and very affordable substitute for a cash security deposit.
What inspired the launch of TheGuarantors?
Moving from France to New York for graduate school, I felt the frustration so many people face when they find a good apartment but don’t meet the standard landlord qualifications. Recognizing this broader need to address the issue of access to rental housing, I started TheGuarantors to empower tenants. Since 2015, we’ve been helping tenants across the country move into their dream apartment, while having more cash on hand when moving in.
How is TheGuarantors different?
We have invested heavily in the development of proprietary, state-of-the-art machine learning technology that is exceptional at identifying risk fairly and accurately, as lack of credit history or inability to meet to standard qualifications does not necessarily mean that you are a bad tenant. . The high quality of our underwriting allows us to be the only operator in our space with the confidence of several A-rated insurer partners. Our highest priority is to deliver exceptional value to our customers, which is why we have also invested significant resources in customer service, eliminating stress and uncertainty for tenants and landlords throughout the process.
We have invested heavily in the development of proprietary, state-of-the-art machine learning technology that is exceptional at identifying risk fairly and accurately, as lack of credit history or inability to meet to standard qualifications does not necessarily mean that you are a bad tenant. . The high quality of our underwriting allows us to be the only operator in our space with the confidence of several A-rated insurer partners. Our highest priority is to deliver exceptional value to our customers, which is why we have also invested significant resources in customer service, eliminating stress and uncertainty for tenants and landlords throughout the process.
What is TheGuarantors target market and how big is it?
TheGuarantors targets millions of American households nationwide. The 46 million households that rent their homes have a collective fund of $65 billion locked away in security deposits. Additionally, we estimate that five million households will struggle to get new rental housing approved this year due to their finances.
Our core products have a total addressable market of $10 billion and our future products will extend our potential reach even further.
What is your business model?
With our Lease Guarantee and Security Deposit Replacement products, tenants pay a small advance or monthly fee and TheGuarantors insures the landlord for loss of rent and/or damage. This proves to be beneficial for both parties.
What are your post-COVID office plans?
We are delighted to have recently moved into our new offices at One World Trade Center in New York. We are offering a hybrid working model and seeing a marked increase in people returning to the office.
What are the biggest challenges you have faced when raising funds?
We have seen that the downward pressure on publicly traded tech stocks has impacted the private equity funding environment. Fortunately, the excellent economic and financial situation of our unit has inspired strong confidence in our sustainability and our continued growth.
What factors about your business led your investors to write the check?
As the largest player in our space, we are the first choice for property managers looking to improve their financial and operational performance. We have built a business with a strong unit economy, strong growth and impressive EBITDA. They are investing in a resilient business that has doubled revenue every year since inception and tripled revenue in 2021, amid market chaos during COVID. Building on these strong fundamentals, we recently launched our own licensed insurance company, making us the first venture backed company in our space to do so. The value of our product also speaks for itself; properties offer our product as a benefit to their residents at no cost to the owner.
As the largest player in our space, we are the first choice for property managers looking to improve their financial and operational performance. We have built a business with a strong unit economy, strong growth and impressive EBITDA. They are investing in a resilient business that has doubled revenue every year since inception and tripled revenue in 2021, amid market chaos during COVID. Building on these strong fundamentals, we recently launched our own licensed insurance company, making us the first venture backed company in our space to do so. The value of our product also speaks for itself; properties offer our product as a benefit to their residents at no cost to the owner.
What milestones do you expect to achieve over the next six months?
We are actively preparing to launch a series of new finance and insurance products on our platform, amid strong demand from landlords for TheGuarantors to offer even more financial solutions to their tenants.
What advice can you give to New York businesses that don’t have a fresh injection of capital into the bank?
I would advise companies to have a sense of urgency and find investors quickly, as the technology funding environment could change quickly. If this is the case, the capital will give them the necessary flexibility to face possible storms.
Where do you see the business going now in the short term?
We plan to quadruple the size of our engineering team and hire aggressively across product, sales and marketing functions. We will invest heavily in our technology and product capabilities to further integrate into owner workflows and systems and create ever more advanced solutions.
What’s your favorite outdoor restaurant in New York?
I’m a fan of Big Tiny in Carroll Gardens, Brooklyn. It offers a fairly large outdoor seating area and delicious traditional French cuisine. At TheGuarantors we help people find a place to call home and this place reminds me of mine!
