Rhino Buys Deposify for Multifamily End-to-End Deposit Management

Proptech company Rhino, which is one of the firms effectively using a form of insurance to potentially replace a cash security deposit, announced that it’s buying the technology and assets of Deposify, which provides cash deposit collection and compliance for landlords and property managers, according to a press release.

The point of the purchase is a “end-to-end deposit management and compliance platform to service more than $45 billion in cash deposits and security deposit insurance for 43 million rental homes nationwide across the entire rental industry.”

In any business, compliance is, to some degree or another, a necessary pain. For residential rentals, states government requirements on how to handle security deposits—how large they can be, how they are to be held, conditions for returning, and so on.

There are a few problems with this. One is that smaller landlords might not do the research to learn the requirements and potentially put themselves at odds with law. Another, larger multifamily operators in more than one state would need to have systems to apply the appropriate treatments for different buildings. It’s a similar issue to what online retailers face in the requirement to manage state sales tax collections.

“Today’s announcement is a direct response to hundreds of conversations with renters frustrated by waiting for deposit refunds and landlords and property managers struggling with time-consuming operations, looking for more cost-effective ways to handle cash,” the release quoted Rhino CEO Paraag Sarva. “While renters and landlords alike are enthusiastic about our work to introduce a new way to secure a home with Rhino’s deposit insurance product, the reality is cash deposits will continue to be used for some portion of transactions, and we’re in a unique position to solve those challenges.”

The move solves some challenges for Rhino as well. As useful as an affordable alternative to a cash deposit might be for many renters, it does limit the market. Landlords must be open to such an arrangement and residents have to clear whatever bars are necessary to approve an applicant.

The acquisition places Rhino in a position where it can more easily handle either contingency, expanding its potential marketing universe. By automating the process, the company creates an opening, able to handle traditional cash deposits as well as alternatives.