Estonian startup Rendin recruited a top-level insurance expert Andres Konsap, a long-time Head of the Underwriting Division of ERGO Insurance SE in Estonia, part of Munich Re. With his joining begins Rendin's journey to becoming an insurance undertaking to simplify entering foreign markets. An investment round for funding the plan opens in autumn.
Rendin, a solution for renting (out) homes and signing secure rental agreements, entered the market a little over two years ago. During this time, it has helped sign over 2000 rental agreements. Currently, the company operates in Estonia and Poland. "For the landlords, Rendin's rental agreement automatically includes rent and utility payments guarantee and protection against property damage. Our Estonian insurance partner is ERGO. Rendin developed its unique service in cooperation with them," explained Alain Aun, the CEO and co-founder of Rendin.
The fast growth and expansion in foreign markets require the company to have a licence to act more independently. "We can be flexible and quick in the product development and localisation for other markets. At the same time, we know partnership negotiations with the local insurers are time-consuming endeavours. However, by assuming the role of an insurance company and focusing our activity on working hand-in-hand with our process, we can provide it much more efficiently and react to the needs of the local market," Aun explained the reasons that led to the decision. In Estonia, cooperation with ERGO is going to continue. However, establishing the insurance undertaking concerns foreign markets.
The CEO of Rendin emphasised that becoming an insurance undertaking doesn't mean that the company will sell insurance in the classical sense. "It is embedded into our services, allowing us to offer a safe way for renting for both the landlords and the tenants. In addition, moving in that direction helps us build the largest company on the long-term rental market in Europe in the next three or four years, providing a new standard for renting (out) a home."
The series A funding round of the startup will help finance the plan. Its total volume is going to be about 20 million euros. According to forecasts, the funding round begins in autumn and will be completed by the end of the first quarter in 2023.
In essence, the process of establishing the undertaking is led by Andres Konsap, the new Head of Insurance of Rendin. "We will apply for an insurance licence and a licence for cross-border operation in the European Union, which will allow us to expand to many countries with an attractive rental market without including a local insurance partner. This way, we can improve the system of managing risks even further because the speed of reacting to the changes in the environment is becoming one of the main competitive advantages, and we want to be the best in the field," he revealed.
"Rendin becoming an insurance undertaking is the next logical step in the company's development. Rendin has fulfilled several important requirements for acquiring a licence successfully. First, we've achieved the product-market fit (the result of the PMF Survey was 66%, and a result of 40% or more is considered a success). Second, the client retention rate is very high (86%) because our product is convenient, solves a specific problem, and creates a lot of value."
He added that risk and process management are also in place: "Rendin and its technology will support the customer for the entire duration of a rental agreement. Therefore, a monetary loss can be prevented or reduced, offering an opportunity to build a highly profitable company."
In the opinion of the head of the company, Konsap's significant strength lies in his knowledge of the insurance sector as well as being familiar with Rendin. "Andres has a thorough comprehension of the workings of traditional insurance companies, starting from their processes and ending with their technical side and the creation of classical insurance products. In addition, he has worked in insurance for about 30 years, so it would be hard to ask for a better fit," said Alain Aun. "When we started to build Rendin, Andres was with us as an advisor from ERGO every step of the way. As a result, he has witnessed our development and growth."