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TheGuarantors raises $50M Series C, plans to supplement rental services with new products

TheGuarantors, an insurtech that serves as a co-signer and guarantees payment to landlords, announced today raising a $50 million Series C led by Portage Ventures, according to AlleyWatch.

The company says it will use the capital to build and launch several new financing and insurance products on its platform, and plans to quadruple its engineering team and aggressively hire across its product, sales and marketing functions.

Launched in 2015, TheGuarantors provides two flagship products which it says help “to create a smart, fair, and human rental experience for customers.” The first product, Lease Guarantee, allows renters access to homes they might not otherwise qualify for, while its Security Deposit Replacement acts as a direct and affordable substitute to a cash security deposit.

The insurtech says that is differs from competitors due to its focus on developing proprietary machine learning technology that can accurately identify risk. It says this provides high quality underwriting and enables partnerships with A-rated insurance carrier partners.

TheGuarantors targets millions of American households nationwide, stating that 46 million rental households have a collective $65 billion locked away in security deposits. It also estimated that five million households will struggle to get approved for a new rental unit this year based on their finances, and says its core products have a total addressable market of $10 billion.

The company also noted that, despite turbulence in the market from COVID, it was able to triple revenue in 2021.

Kensington Capital Partners, Arch Capital Group, Roosh Ventures and returning investor Alven also participated in the funding round, which brings TheGuarantors total funding raised to $76.7 million. The company previously raised an $11.7 million Series A led by Alven and White Star Capital in 2017, and a $15 million Series B led by Global Founders Capital in early 2019.

While the company says that downward pressure on publicly traded tech stocks have impacted the private equity funding environment, its unit economics and financial standing helped it secure the new capital and “inspired strong confidence in our sustainability and continued growth.”

“As the largest player in our space, we are the first choice for property managers looking to improve financial and operational performance. We’ve built a business with solid unit economics, strong growth, and impressive EBITDA. They’re investing in a resilient business that has doubled revenue annually since inception and tripled revenue in 2021, amidst chaos in the market during COVID,” TheGuarantors co-founder and CEO Julien Bonneville told AlleyWatch.

“Based on these strong fundamentals, we have recently launched our own licensed insurance company, making us the first VC-backed company in our space to do so. Our product value also speaks for itself; properties offer our product as a benefit to their residents, at zero cost to the landlord,” Bonneville said.

Since its founding, TheGuarantors has provided over $1.5 billion in total coverage across 49 states, and says it has streamlined the lease process by 22 days. It also noted that its services are available for properties from property managers and developers including Brookfield, Equity Residential, Tishman Speyer, Rockrose and Silverstein Properties.

In other recent proptech news, RET Ventures launched its ESG-focused Housing Impact Fund led by REITs Essex Property Trust and UDR. Reggora and Clear Capital also partnered to provide improved appraisal quality control solutions.

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