Think of your last moving day, was it a complete headache? Well, understand that in the U.S. renters are required to transfer all-cash deposits to their landlords, and only get the money back months after the lease is up, only to then move the deposit to their new landlord. Sounds a bit chaotic, right? Israeli Fintech startup Obligo has developed a solution for this sticky situation.
Renters avoid crippling debt, while landlords receive deposits on time
There is an overlapping period between when the renter gives their landlord the deposit to when the landlord returns the deposit, once the lease is over. This oftentimes causes renters to find themselves in swelling debt after dropping another security deposit at the new landlord’s door. Obligo’s system connects to the renter’s bank account and determines if they were problematic renters for any reason. Then instead of paying a deposit or buying deposit insurance, renters submit a payment method for pre-authorization, similar to a hotel check-in process.
Obligo enables tenants to rent an apartment without a security deposit. I. If the landlord submits a charge at the end of the lease, Obligo pays out first, while the renter can repay either in full or in installments. Before applicants are approved to join the platform, they must connect their bank account to the platform using Open Banking technology and pass a financial screening powered by Obligo’s AI-based underwriting engine.
Today (Wednesday), Obligo announced a $15.5 million Series A funding round. The investment was led by 10D, with participation from Entrée Capital, Viola Credit, 83North and strategic real-estate investors.
“With the economic impact of the COVID-19 crisis, deposit-free renting has never been more relevant,” said Roey Dor, CEO of Obligo. “We can help families avoid the burden of paying a security deposit at move-in, or return their deposits in the middle of their lease. Landlords that utilize our technology enjoy reduced operational costs and are able to promote their properties as deposit-free communities, providing a powerful incentive that drives both move-ins and renewals.”
Obligo was founded in 2018 by brothers CEO Roey Dor, COO Omri Dor, VP R&D Or Harary, CTO Yiftah Barouch, and Eran Heffetz. The funding will enable Obligo to roll out its deposit-free technology to millions of homes across the U.S., with Europe in-sight. Obligo has established partnerships with leading property managers in the U.S., and has raised a total of $20 million to date.