This NYC Startup “Insures” You’ll be Qualified for Your Next Apartment



Qualifying for an NYC apartment can be tough in general, but add being a student or a foreigner into the mix and it can really put a strain on renting an apartment. The tough requirements combined with the ever increasing rents may force you to lose out on your dream living space and TheGuarantors are not willing to let that happen. The company backed by Hanover Insurance offers a guarantee on your rent in order that you not be rejected by management companies for not making 80x or some arbitrary multiple of the rent. With default risk lowered, management companies now have an incentive to rent to a more inclusive population.

AlleyWatch chatted with cofounder Julien Bonneville about the young startup and how it plans to expand.

Tell us about the product or service.

We offer a Lease Rental Guarantee, issued and backed by The Hanover Insurance Company, which protects landlords from risk and qualifies renters for apartments. There are huge demographics of the population that really struggle to rent apartments, especially in New York City, because of stringent qualification requirement. Foreigners, students, self employed individuals, and recent graduates are all going to have a tough time qualifying for an apartment. Renters can apply for our guarantee, which will qualify them for thousands of apartments in New York. Landlords accept renters with our guarantee because it eliminates any risk of loss from a default, as we agree to pay any loss of rent in the case of a default or lease break.

How is it different?

TheGuarantors is different from anything on the market because we have a strong focus on technology, user experience, and transparency. Our goal is to be the most user-friendly possible, for renters, landlords, and brokers. We’ve developed a strong tech platform, which allows excellent transparency of our process to all stake holders. The platform is exceptionally efficient, well automated, and 100% online, which allows us to move faster than a leasing office in order to avoid slowing down their process. We’ve actually found that we’ve helped speed up the closing of deals for landlords, brokers, and renters. Insurance and real estate are two markets that tend to be stuck in the past; we’re trying to help push the future forward for these markets.

What market are you attacking and how big is it?

Right now, we are attacking the New York City real estate market. We’re also expanding to the New Jersey Gold Coast. The market size just for New York City is about $200M in revenue per year for our product.

What is the business model?

Our business model is quite simple. Renters apply for our Lease Rental Guarantee, and if approved, pay a one time up front fee for our premium. The renter is the buyer of the insurance policy and the landlord is the beneficiary. We developed a risk mitigation strategy in order to make this model highly profitable.

What inspired the business?

I arrived in the U.S. in 2010 to study at Columbia Business School and I struggled to be able to rent an apartment here in New York. A few years later in 2014, I decided to launch this new insurance product to help all of these segments of the market – foreigners, students, retirees, and entrepreneurs – rent in buildings they wanted.

How do you plan on expanding beyond NYC where rental requirements are not as stringent?

Right now, we estimate that our product is relevant for eight to ten cities, which will be our target next markets. In the future, our goal is to develop further products that are more mass market ready. Our current product is great for New York City, but we’re working on some future products that will be suited for a nationwide mass market.

What are the milestones that you plan to achieve within six months?

In 6 months we’re hoping to be accepted in 100,000 units in the New York City metro area. With the help of our investor base, including White Star Capital and several large New York City landlords, we’re confident that we can meet this goal.

What is the one piece of startup advice that you never got?

Gaining trust in a marketplace can be a huge challenge. As a start up, the market is used to whatever has stood before you, and people are hesitant to try something new.  I wish someone had given me the advice to truly be patient and try and develop trust gradually. Real estate is a long term play, and developers want to rely on partners that will be around many years from now, so being a startup can be tricky in this industry. It can take a long time to build relationships when you’re the new kid on the block, but at the end of the day, relationships are the absolute most important factor for success in a start up.

If you could be put in touch with anyone in the New York Community who would it be and why?

I’d have to say Michael Bloomberg. His success in rezoning the New York City Waterfront as well as his experience in the tech world makes him someone we’d love to sit down with. He knows New York real estate extremely well and has had massive success in the industry. Between Bloomberg Terminal and his experience with New York real estate, he’d be an amazing person to connect with.

Why did you launch in New York?

Besides the fact that New York is truly the center of the business world, we were immediately drawn to the market size and relevance of the product, due to the fundamentals of the market, along with the legal and real estate regulatory landscape, which was the perfect fit for the product.

Where is your favorite fall destination in the city?

Our favorite fall destination in the city is Prospect Park.

About the author: AlleyWatch

AlleyWatch is the destination for startup news; opinions and reviews; investment and product information; events reported, experienced, seen, heard and overheard here in New York. But it’s who we are that makes us different: we’re the writers and the entrepreneurs; the investors and the mentors; the lawyers and the marketers; the realtors and the recruiters – the people who work in the industry.

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