NYC-based insurtech startup Rhino announced Tuesday it closed on a $95 million funding round led by Tiger Global, capping off more than a year of rapid growth brought on, in part, by the pandemic.
Rhino provides security deposit insurance that renters can use in lieu of cash, offering tenants a product that can substitute for a traditional deposit in exchange for a monthly fee. Instead of a large upfront cash deposit, renters pay Rhino a small monthly fee that can be as little as $1.50 a month, and the company insures the landlord for any damages that might occur or lost rent. The goal is to lower the cost barrier to renting a unit, which, ideally, attracts more tenants.
“Security deposit insurance has already seen great success and is an industry poised for explosive growth,” Rhino co-founder and chairman Ankur Jain said in a statement. “This funding will allow us to take our product to even more renters, launch new products, and help make housing more affordable, which is especially crucial during the pandemic when this issue is front a center for so many Americans.”
Indeed, a report recently published by Brookings found that more than 40 percent of respondents said they had no emergency savings set aside, and this problem has only been exacerbated by the pandemic. In fact, nearly one in three Americans did not pay rent in April of 2020 — and that was when the pandemic was only a month along.
Rhino has been working to help solve this crisis through its affordable security deposit insurance solution, as well as by advocating for legislative action — namely, the Renter’s Choice and Flexibility Plan. The plan aims to make it easier for both landlords and renters to use affordable deposit alternatives, potentially reducing housing costs in America by billions of dollars.
“Putting renters first in our business has given us the opportunity to become renter advocates at a national level,” Rhino CEO Paraag Sarva said in a statement. “We advocate for renter-friendly legislation like Renter’s Choice because nearly half of Americans are unable to afford a $400 emergency expense and that makes housing affordability one of the most pressing issues in America right now. With $45 billion sitting locked away in escrow accounts, unusable for both renters and property owners alike, we need common-sense legislation that can put that money back into the pockets of people who need it the most — renters.”
So far, Rhino says the policy proposal has garnered support from 14 bipartisan elected officials, and has been put into place in cities like Cincinnati and Atlanta, as well as temporarily by executive order in New York, New Jersey and Connecticut.
Rhino has also been experiencing some success on its business end, claiming its contracted annual recurring revenue has seen 1,500 percent growth over the last two years, ballooning from $4 million in January of 2019 to $60 million in January of 2021. The company also says it has saved renters more than $250 million in just the last year and a half.
To keep up the momentum, the company plans to use this fresh funding to reach more renters through more partnerships with property owners and more products. Rhino is planning a hiring push too. The company has tripled in size over the last 18 months and wants to double its headcount to more than 200 employees in 2021.
The four-year-old company is also considering going public, with Jain telling TechCrunch that Rhino might pursue an IPO in the next year or two.
