iSeed reposted this
Pre-Seed Investor @DeVC || Prev: Founder @Verak (acq. by ID)
I’ve rented 3 homes in the last 5 years. I’ve always been lucky - the deposit has never been more than 3 months rent, I’ve never had a problem recovering my deposit. But, I’ve heard dozens of horror stories from friends, co-workers & others: 6-9 months of rent as deposit, idiotic reasons given for deductions during deposit refund & much more… In India, most of my friends got financial help from their parents to pay the deposit for their 1st rental house. Almost all of my friends who rent continue to complain about deposits. 💡 When I stayed in the UK (pre-2020), all of my friends used a product called “Fronted” which provided a 0-deposit facility to move into rental accommodation… When I came back to India, I always wondered why such a product didn’t exist (**) 4 years later, Ankur Yadav said hi to me at an event in Gurgaon. In the 1st conversation itself - he & his co-founder Navan Jaiswal came across as the right people to solve the deposit problem for tenants in India. This week, Ankur & Navan’s company CirclePe announced its $1M Pre-Seed round led by OTP Ventures with participation from Utsav Somani's iSeed fund, Shiva;s 1947 Rise Fund and Arjun Vaidya (all three close friends!). ➡️CirclePe allows credit worth tenants in India to move into any home of their choice with a zero-deposit credit facility (provided the landlord agrees). If you see their Instagram page, they are already advertising such homes in NCR & have major B2B partnerships aligned. This is a product which India needs & I’m glad to be a small investor in CirclePe; wishing the team the very best 🙏 Call to action: Please check the comments for their open roles + my detailed investment memo + disclaimer ⤵️
PS: NCR folks - CirclePe is hiring for a bunch of roles which you can find here: https://docs.google.com/forms/d/e/1FAIpQLSfKUdeGzzjldJx-HVznKeQFG63vq1_ZS78cH4KZftkPKNAsTA/viewform
Eqaro is already doing rental bonds with the majority of the players in the co-living industry. Scaling this is a problem. I know a couple of people who have tried this in the past, none of the landlords even want to talk about it. Landlords in good areas don't care about it as they get their deposits which is also another source of income for them. They feel there is nothing in them to work with another party for a straightforward transaction. Extremely difficult in a market like India, would be interesting to see how they go about.
Why would the landlord agree and what's in it for them to agree? Also will the 0- deposit scheme mean a higher than usual rentals?
While I totally understand and empathise on the demand side, very sceptical on the supply side. This problem is acute in Bengaluru. But the landlord/landlady doesnt think this is their problem. I have personally seen they have kept their property empty for a month but has not decreased deposit or rent. Cracking supply is key i guess. Demand toh hai!
I don't have good feelings about this. A similar system exists in South Korea, and the impact has been to push up deposit prices so high that now no one can afford a deposit without the sponsoring institution. This is not even getting to the financial viability of this model.
This is very interesting!! Bengaluru folks would be happy to welcome them to their city lol
The biggest problem you mentioned in thr bracket(provided the landlord agrees) I live in BLR and landlords here not only take 10 months deposit but will also humiliate you while leaving the apartment and will definetly not return your deposit.....I think this needs government intervention as no app or startup could solve this entitled behaviour of landlords
So this product has a catch if Landlord agrees out and In India no landlord will agree. This cant be scaled out. I have seen landlord where if someone said he is working with government job ,Never reduce his month deposit.I dont know how this is going to work here.
Pre-Seed Investor @DeVC || Prev: Founder @Verak (acq. by ID)
6moMy investment memo (written at time of investment) can be found here: https://rahulmathur.notion.site/CirclePe-Investment-Memo-662a86f9c8d545b491c94be8e8059dad Disclaimer: This investment was made in personal capacity PRIOR to joining DeVC. I no longer make investments in individual capacity. (**) The alternative product is a rental bond (which as I explain in my memo isn’t an ideal offering)