Obligo, a fintech startup that’s focused on the real estate market, announced on Tuesday it has raised $5 million through its latest financing round to launch its next-generation security deposit alternative. The funding round was led by 83 North (formerly Greylock IL) and included investments from Entrée Capital and HFZ Capital, in addition to a $2 million credit facility from Viola Credit. The company declared:
“The financing arrives in conjunction with the commencement of two new landlord partnerships that will help launch the company into the mainstream rental landscape. Olshan Properties, a privately owned real estate firm, and Adam America, a leading real estate developer and investor, collectively own and manage more than 15,000 rental units throughout New York City. Obligo has plans to scale nationwide following its initial launch in the New York residential real estate market.”
While sharing more details about the company’s technology, Obligo CEO and Co-Founder, Omri Dor, stated:
“With a traditional deposit, you’re paying a huge sum in advance for damage that likely won’t happen. It’s wasteful and completely unnecessary, considering what’s possible with modern financial technology. What Obligo offers is a common-sense approach. Tenants should only pay for damages if they actually cause damages.”
David Buttress, Partner at 83 North, also commented:
“Many around the world have recognized the need for a new model to replace the traditional security deposit. We reviewed quite a few solutions, and Obligo stood out as a clear front-runner with outstanding technology and an efficient credit-based capital structure that enables the company to reach a remarkably low price point. This is the only solution we’ve seen that can truly make the security deposit system obsolete.”
Proceeds will also be used to drive new client acquisition, meet the growing demand for deposit-free leasing, and further advance the development of Obligo’s underwriting and payment technology.