Replacing burdensome rental deposits with digital insurance — why we backed INZMO

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INZMO founders Meeri and Risto

INZMO just announced their €3.1 million seed round led by Change Ventures, joined by Swiss Insurance giant Helvetia. It’s time to dissect the genesis of this deal.

Every now and then we meet founders with unquestionable drive and determination, but the problem they’re working on doesn’t support the VC scale return expectations. In these cases, we have to respectfully decline to invest, while at the same time hoping we could have another look if they happen to pivot to more substantial problems. This was the exact case with the INZMO founder duo Meeri and Risto. Their initial pitch in 2015 was for BikeID — an international bicycle registry, security marking kit, and insurance for bicycles. Definitely a real problem to solve, but hard to make a case for VCs to get excited. Not long after the initial pitch, the ambitious founders pivoted and rebranded as INZMO, which set out to provide hassle free insurance for millennials. The new approach helped them raise proper pre-seed funding, making us wonder if we would ever get to have another chance to invest. Turns out there was another chapter for us in INZMO’s journey after all.

Fast forward five years, Meeri e-mailed us that she just got back from Berlin (where INZMO was now headquartered) and wanted to discuss potential funding options around their bold new plans. It didn’t take us long to realize the now-or-never opportunity to back Meeri and Risto as they ramped up their ambition once more. The past five years equipped them with invaluable first-hand experience regarding what it takes to build a successful insurtech. And as a cherry on top of the cake, they now had a full-stack digital insurance platform humming and ready to go. With the added funding and industry specific support from Helvetia Venture Fund, we took the deal and ran with it.

With new money in the bank, INZMO is taking on burdensome residential rental deposits in Germany. Dominated by 40-million-plus private rental premises, the German law enables landlords to ask for 3 month worth of rental deposit at the signing of rental agreement. Considering the average deposit size of €4,000 and the average duration of a rental agreement of 5 years, vast amounts of tenants’ personal wealth is locked in rental deposits. That’s a lot of money one could reasonably expect to spend or invest elsewhere.

To free up tenants’ finances, INZMO offers to replace the lump-sum deposits with affordable deposit insurance fee, starting from as low as €3.50 a month. Their deposit insurance can be used for both new and existing rental agreements, effectively widening the TAM. As there’s no reason why modern solutions should mimic the old-school paperback processes, the entire insurance purchase can be easily managed via INZMO mobile app. The user experience will be especially welcomed by the younger generation of tenants as well as landlords valuing convenience.

To get to their target customers, INZMO will partner with multiple stakeholders in the residential rental market, including property owners, agents and marketplaces. As a pledge of credibility, the rental deposit insurance will be backed by none other than the Société Générale.

INZMO is definitely off to another ambitious chapter and we are excited to be part of the journey. We can assure that there’s a lot more in the making that we can’t publicly discuss — stay tuned for news and feel free to reach out if you want to explore potential collaboration avenues.

Rait Ojasaar
Partner at Change Ventures

Backing ambitious Baltic founders. We invest at pre-seed/seed in teams with the grit to build global businesses, bring a deep network and follow-on investment.

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