Jetty — a startup in the growing ‘insurtech’ space working to upend insurance and security deposits for renters — just got a major vote of confidence in its mission from property developer LeFrak.
LeFrak joined Jetty’s August Series A round as a late investor at the end of 2017. The company contributed to the $11.5 million Jetty already announced bringing on, but the two companies declined to disclose the size of LeFrak’s contribution.
Jetty co-founders Mike Rudoy and Luke Cohler. Credit: Jetty
At the same time, LeFrak will offer Jetty’s security deposit replacement product to tenants in multifamily buildings across its portfolio.
“They brought outstanding technology talent to an old and tired industry that was finding it very challenging to sell to modern consumers,” said William Field, who oversees LeFrak’s investments. “They have a big vision to really reinvent a way to market, sell and service insurance.”
The New York-based startup founded in 2015 already has major investors across tech: Valar Ventures, Box Group, Red Swan Ventures and others. And LeFrak is invested in red-hot real estate tech startup Compass, Juniper Square and a number of other tech startups.
LeFrak’s decision to support Jetty through both its residential and investment sides gives Jetty a new source of funding and a new source of business. Jetty launched its first products in four states in April and is now available in 43 states.
“I always want the standalone investment case to be compelling enough to move forward, and I was still excited to move forward in the absence of any clear synergies to benefit our multifamily operations,” Field said. “My senior real estate colleagues got to sit in and get to know the team and they were excited by the potential of offering Jetty to help enhance the experience of renters.”
The Jetty Passport product LeFrak is offering to some of its residents — starting with one building in New York with a few hundred units — lets renters pay 17.5 percent of their security deposit to Jetty, which then indemnifies the landlord for the full deposit amount.
Renters don’t get that 17.5 percent back, like they could with a regular security deposit, but they also don’t have to put down the full 100 percent of the deposit up front. Property managers and landlords have to sign on to use Jetty before a renter can take advantage of the service.
Jetty also offers renters’ insurance and will co-sign customers’ apartments as a guarantor.
“To have such a marquee name in such a well-respected company working with us on the commercial side is a huge deal — not just the sheer scale, but how they’re regarded from other real estate companies in the industry,” Jetty CEO Mike Rudoy said.
“LeFrak is very selective in their investments,” he added. “When they do choose to invest it’s in a company they really believe in.”
Correction: this article originally stated that Jetty pays the full renters’ deposit to landlords. This is incorrect and has been updated in copy. We sincerely regret the error.
