This installment of Funded in the Alley is presented by Bond Collective. Leading the way in hospitality and luxury offices space, Bond Collective designs workspaces to empower individuals and companies to be themselves. Rather than fit you into a limited, traditional office environment, Bond 60 Broad features larger 15-50+ person suites customized around your needs: privacy with access to community, concierge service, views of the Statue of Liberty, sound booths, and designer furnishings, just to name a few. Focus on your dream, and we’ll handle the rest.
The process to rent an apartment in New York is painful and expensive – it includes hiring movers, broker fees, income verifications, endless documentation, and potentially having to upgrade your decor. The last thing you want to think about is having to pay an amount equal to two months of rent for your security deposit and having it tied up for the duration of your lease. Rhino addresses this last pain point by replacing security deposits with a small monthly premium paid to Rhino. Similar to an insurance product, the company guarantees that the rent will be be paid to the landlord. The company benefits both landlords and tenants by removing administrative headaches and financial burdens associated with security deposits.
AlleyWatch chatted with cofounder and CEO Paraag Sarva about the Startup and how it plans to change the renting landscape.
Who were your investors and how much did you raise?
Rhino raised a Seed round of $1.94 million, led by ff Venture Capital, with participation from Lakehouse Ventures, Picus Capital, FJ Labs, Red Dog and a number of angels and real estate owners.
Tell us about your product or service.
We’re building new products to change the way business is done and make renting easier for both renters and landlords.
Our first product replaces security deposits. With Rhino, renters pay just a small monthly fee instead of a security deposit, and landlords receive double the protection. Pricing is personalized for each renter and starts as low as $19/month for a $2,500/month apartment.
What inspired you to start the company?
There are over 110 million renters in the United States and they are spending more of their annual income on housing costs today than at any other time in modern history. At the same time, it’s also getting tougher for landlords, with rent concessions reaching all-time highs as landlords try to outcompete one another. Our goal is to leverage new technology to improve renting for both renters and landlords.
How is it different?
Rhino is the first insurance alternative for security deposits that actually benefits both the landlord and the renter. Renters have the opportunity to save thousands upfront, while landlords can attract more qualified renters and receive more protection.
What market you are targeting and how big is it?
Rhino is targeting the $35+ billion national market for security deposits, with an initial focus on the $4+ billion New York City metropolitan market.
What’s your business model?
It’s a traditional insurance model. We collect a small monthly fee and pay out claims when they occur. We keep a portion of the profit.
Why would a landlord be in favor of Rhino?
Rhino helps landlords fill vacancies faster, increases renewal rates for good renters, and provides more coverage than traditional security deposits. And it’s free for landlords.
What was the funding process like?
We were fortunate to have participation from some of the top technology and real estate investors across the globe and we were oversubscribed.
What are the biggest challenges that you faced while raising capital?
Part of our business deals with insurance, which can be a scary and misunderstood topic for many people, including investors. Dispelling that fear was an interesting but surmountable challenge.
What factors about your business led your investors to write the check?
Many parts of the real estate industry are outdated and inefficient. By eliminating security deposits, we are eliminating a major upfront transaction cost for renters and replacing it with a modern solution that’s better for everyone.
What are the milestones you plan to achieve in the next six months?
In the next six months we plan to continue to rollout across NYC and expand our efforts in other states.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Make as much progress as humanly possible before seeking outside investment capital. If you’re motivated and demonstrate real progress on your own, then investors join you for the ride.
Where do you see the company going now over the near term?
We launched in the New York City market last month. Our product is relevant everywhere security deposits are collected and we plan to expand beyond New York soon.
Where is your favorite fall destination in the city?
While I’m a Queens native, I now live in Brooklyn with my family. Greenwood Cemetery is an amazing and historic place year-round, but particularly worth a visit in the fall when leaves are changing.
This installment of Funded in the Alley is presented by Bond Collective. Leading the way in hospitality and luxury offices space, Bond Collective designs workspaces to empower individuals and companies to be themselves. Rather than fit you into a limited, traditional office environment, Bond 60 Broad features larger 15-50+ person suites customized around your needs: privacy with access to community, concierge service, views of the Statue of Liberty, sound booths, and designer furnishings, just to name a few. Focus on your dream, and we’ll handle the rest.