Israeli Founders Building a FinTech Venture: Omri Dor, Co-Founder and COO of Obligo (Part 5)

Sramana Mitra: How does that work out ROI-wise? $3,000 is the security deposit and $10 a month. For how long? Is there a cap?

Omri Dor: We’ve done a lot of experiments since. The price is in the range of 6% to 12% APR on your deposit. If you choose the Obligo service and keep your $3,000 deposit and invest that with something that returns more than 6%, you are making money. Let alone if you have credit card debt. For the renter, there is a value.

For our side, what we needed to know about some statistics about how much do landlords charge on average. A big unknown was what was our collection performance going to be at the end of the lease. If the renter owes money, would we be able to collect it?

Sramana Mitra: We’re in May 2018. You have this validated. How has the business ramped? Are you now doing direct deals with the landlords?

Omri Dor: In terms of go-to-market, we had a couple of strategic investors in seed. We have a very tech-savvy landlord here in New York that joined the round and was willing to give us their properties for a pilot. That was the first thing.

A lot of our seed stage was just to prove that renters are taking the deal. In terms of the business model, it seems like we have a B2C SaaS business. We’re getting individual renters who pay us subscriptions. If you think about how we sell our product, we sell it to the property manager. It’s a B2B2C.

If we look at our economics, we need to acquire a building. That building naturally has a turnover of renters. 30 renters are going to turnover a year. Out of which, we are to convert 20. Those 20 are going to pay us $200 each for their first year. The building is going to make us $4,000 on its first year. We look at the building level and we count the number of units. Then we measure, on average, how much those units are making yearly.

That tells us everything we need to know. We have two cohorts. One is to check the renters. Layer two is we acquire buildings. The buildings make money over time. How long does it take us to recover that cost? If you can prove both things, then you have a good scalable business.

Sramana Mitra: How many buildings did you get to by the end of 2018?

Omri Dor: We had 5,000 serviceable units.

Sramana Mitra: What’s the next milestone?

Omri Dor: Our strongest asset is our technology team back in Tel Aviv. That has caused us to create a massive gap in our intellectual property, in the product, and the level of integrations that we got. A lot of these processes are ripening right now. I hope to be in a position where Obligo can embed itself in a very small widget within platforms that are already in front of renters.

This segment is part 5 in the series : Israeli Founders Building a FinTech Venture: Omri Dor, Co-Founder and COO of Obligo
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