Fintech Obligo, which uses letters of credit (L/Cs) from banking giant Wells Fargo to back its security deposit alternative for landlords and tenants (DC World News, 1 July 2022), has raised US$35 million to expand its operations and build its share in the potentially lucrative market for US security deposit guarantees.

Co-led by global venture capital firms 83North and True Global Ventures, the new funding specifically aims to accelerate the expansion of Obligo's strategic partnerships and the launch of additional products.

MUFG interest

One of the new investors participating in this funding round is MUFG Innovation Partners (MUIP), the venture capital arm of one of the world's largest financial institutions, Mitsubishi UFJ Financial Group (MUFG), which may well be eyeing the potential for Obligo's solutions to be incorporated into the group's core financial services offerings.

MUIP focuses on investing in and collaborating with innovative start-ups and fintech companies globally to foster innovation within the financial sector. Its primary mission is to support start-ups that offer cutting-edge technology or solutions that can be integrated into MUFG's banking, financial services, and operations.

Alongside MUIP in becoming new equity and debt investors in Obligo in this funding round are 10D, Entrée Capital, HighSage Ventures, and Viola Credit.

Combining old and new

Obligo now offers a unique security deposit alternative that leverages bank-issued L/Cs to provide security, flexibility, and streamlined transactions for both landlords and tenants. This innovative approach, supported by Wells Fargo, is the first of its kind to use L/Cs as a security deposit alternative.

The fintech's solution combines open banking and artificial intelligence (AI) to assess renters' eligibility to live deposit-free, offering a more accessible and efficient solution to the traditional security deposit process.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.