Obligo Inc., a financial technology company serving the real estate market, has completed a $5 million financing round.
Obligo has developed a new financial standard to replace the security deposit . Under this new standard, tenants would provide landlords with a limited billing authorization instead of a cash deposit, allowing landlords to bill them for any damages incurred at the end of tenancy.
This billing authorization relies heavily on state-of-the-art Open Banking technology, and is backed by a credit-based capital structure.
Obligo’s solution has been developed in collaboration with Silicon Valley Bank’s New York City FinTech team.
The seed 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.
Proceeds will be used to drive new client acquisition, meet the growing demand for deposit-free leasing, and further advance the development of Obligo’s cutting edge underwriting and payment technology.
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.
“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,” said Obligo co-founder Omri Dor. “What Obligo offers is a common-sense approach.”