FinTech News
Security Deposit Solution FinTech Obligo Raises $35 Million
A FinTech that offers tools for landlords and renters has announced its latest funding.
About the round:
This week, Obligo announced a new $35 million in funding. The Series C was led by True Global Ventures and 83North while a mix of equity and debt investors also participated in the round. This list includes 10D, Entrée Capital, HighSage Ventures, MUFG Innovation Partners, and Viola Credit. To date, the company has now raised a total of $92.5 million, including a $35 million Series B in 2021 (which was also led by 83North).
As the FinTech notes, this funding arrives as the platform continues to expand. This includes a recently announced partnership with a trio of property management software offerings: AppFolio, Buildium, and Yardi. Looking ahead, Olbigo says the new funding will allow it to increase its product innovation and IP development as well as pursue additional strategic partnerships. With these steps, the company says it will move closer to reaching profitability.
About Obligo:
Obligo is a platform looking to revolutionize the traditional “security deposit” that most landlords require of renters. Rather than providing funds upfront that are held onto until renters move out of damage-free units, Obligo users give their landlords a billing authorization for any damages. These damage charges are limited to a certain dollar amount and can be disputed if necessary. Also notable is that, while landlords are always instantly paid upon making claims, users who don’t have the funds to cover claims can set up monthly payment plans with Obligo. With these features, the company says it hopes to make “the move-in and move-out process as simple as checking in and out of a hotel.”
What they’re saying:
Announcing the latest funding, Obligo CEO and co-founder Roey Dor said, “This investment is a testament to the market’s confidence in our machine learning technology, API-first distribution strategy and our vision for the future of renting. The value is clear: a recent survey showed that 55% of renters cited Obligo as a key factor in selecting their current home.” Dor added, “With these additional resources and our recently announced property management software partnerships, we are uniquely positioned to become the top deposit solution for millions of U.S. homes.”
My thoughts:
Personally, I’m a bit torn on the concept of Obligo. Although I can appreciate the idea of allowing renters to keep their security deposit and only forcing them to pay for actual damages they make, there’s also a scenario where transitioning from an Obligo-supported property to one that doesn’t use the service could make things even more difficult for renters. On the one end, tenants could be on the hook for unexpected bills from their former landlord while also delivering a new “traditional” deposit to their new landlord.
Given these factors, I’m unfortunately not too surprised to see that the company is not yet profitable and is raising a round that is equal to its last. That said, there is still hope that Obligo can overcome these challenges and truly make a difference in the way Americans rent.
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