Dublin-based fintech start-up Deposify is looking to raise $3 million (€2.5 million) from new and existing investors as it seeks to accelerate growth in the US.
The move comes as the company is about to sign its third US banking partner.
Deposify provides escrow services to landlords, tenants and letting agents. The company, which has offices in Dublin and Boston, expects to be in five US states by the end of October, giving it access to a market of more than 7.5 million renter-occupied units and over $25 billion in security deposits.
Founded by Jon Bayle, its payments platform allows landlords and tenants to manage and control how and when rental deposits are paid, and to resolve deposit-related disputes quickly. The company has partnered with Bank of Ireland for its banking solution and the Dublin-headquartered software firm Escher Group for its technology platform.
Deposify signed the People's United Bank, a Connecticut-headquartered savings and loan company with 5,000 employees and over $43 billion in assets, earlier this year.
The start-up recently signed a deal with a second as-yet-unnamed bank to distribute 5,000 Deposify accounts in a deal which is expected to add about €2 million in revenues. It expects to confirm its third US banking partner before the year’s end and also has three memorandum of understanding agreements with three other financial institutions.
‘Competitive process’
"It is very much a competitive process now where we want to take the deals that have the best commercial terms for us," Mr Bayle told The Irish Times.
“There are 100 million renters across the US and Europe. Once we’ve achieved sufficient success in the US we’ll be returning our focus to Europe for the next phase of our expansion, which will likely be in France and Spain.”
A former solicitor with more than 10 years' experience working on leading mergers and acquisitions, Mr Bayle set up Deposify in 2014. The company raised €1.1 million from a number of sources last year including Bank of Ireland's Start-up and Emerging Sectors Equity Fund, which is managed by Delta Partners. Other investors include Enterprise Ireland and the Escher Group.
The company has also beefed up its executive team with Tony Kelly, the former chief executive of Irish software development company Demonware coming in as its chief operating officer.
Deposify also operates in Ireland and, having seen first-hand the difficulties that can surface between landlords and tenants, Mr Bayle has urged the Irish Government to look beyond having a regulated custodian scheme for rental deposits. He has has called on Minister for Housing Eoghan Murphy to consider the Massachusetts model where landlords are obliged to create joint trust accounts with local banks.
‘Held in trust’
“Landlords are required to keep a tenant’s security deposit in a separate, interest-bearing bank account that is clearly identified as containing funds that do not belong to them and which are being held in trust. The landlord pays any interest earned to tenants and must also provide them with account details and a statement on the condition of the property being rented out,” he said.
“Something similar could work in Ireland with local banks offering trust accounts, a move that would broaden the deposit base and possibly provide access to new customers and services for financial institutions. It would also give better visibility to landlords and tenants and thereby help to resolve potential difficulties that may arise between them,” Mr Bayle added.
