Rhino today announced that it has raised $95 million, an investment that values the startup at just under $500 million. Tiger Global led the round, an investment that Rhino described as "pre-IPO" to TechCrunch.
Rhino provides an insurance product to real estate companies, allowing them to forgo traditional rental deposits from tenants, and offering renters an insurance product that provides similar utility for a regular fee.
As part of its funding news, Rhino disclosed that its contracted ARR has scaled quickly in recent years, from $4 million in January 2019 to $60 million in January 2021. The ARR figure represents the amount of expected customer volume from buildings that Rhino has contracted with. The company's co-founder and chairman Ankur Jain described the number as conservative in a phone call with TechCrunch.
TechCrunch spoke with Jain, who is also the CEO of Kairos, a brand portfolio that includes the insurance startup, about its new investment. Kairos, Jain said, wants to lower costs for younger generations. Rhino fits that goal as upfront costs for renting can be prohibitive and its service could make the process less dependent on renters having lots of cash that they can lock up for the period of their lease.
Jain described Rhino as something that can help landlords and renters by lowering the barrier to renting a unit, thus widening the potential customer pool. More possible customers, the logic goes, the more units that may be rented.
The economics of the business appear favorable for Rhino. Jain told TechCrunch that COVID-19 did not push the economics -- the contribution margin of its core insurance product -- negative. Given how we've seen some high-growth insurance products post histories of negative contribution margins, Rhino appears to be in good health. (TechCrunch confirmed that this result was inclusive of loss-adjustment expenses.)
Sufficient health to take it public in time? Perhaps. Jain told TechCrunch that its new lead investor Tiger has lots of experience taking companies public, something that his company might pursue in 12 to 24 months.
Given the climate, we asked the SPAC question. The CEO said that traditional IPO was more the goal.
If you are surprised to see the CEO of a yet-startup talk about going public so honestly, recall that Lemonade went public in mid-2020 with modest revenues to great effect. Another neo-insurance provider, Root, also went public though it has lost ground since. MetroMile, yet another player in the world of startups offering insurance products, intends to list via a SPAC.
And more startups are working on related problems. The insurtech boom appears to be continuing its 2020 excitement in 2021.