TLabs Showcase on travel startups featuring US-based DepositGuard, a payment system for the vacation rental sector.
Who and what are you (including personnel and backgrounds)?
DepositGuard is a patent-pending, web-based service that securely collects, holds and administers the deposits and pre-paid rents for vacation and residential property transactions, benefitting both renters and homeowners (including landlords, property managers and rental agents).
DepositGuard, an Austin, Texas-based company, was founded by Alan Lane and Matt Neal. Lane, DepositGuard’s Director of Business Development, was a partner in a successful international vacation real estate sales, rental, and marketing company.
Neal, DepositGuard’s director of operations, has been in the vacation real estate industry since 1996 and has been a licensed broker in Colorado since 1998.
Prior to founding DepositGuard, Matt owned and operated a vacation real estate sales, rental and marketing company specializing in high-end luxury properties. Our experience led us to see a critical void in the market; and we saw a place to use our talents and experience to solve it.
What financial support did you have to launch the business?
Initially, DepositGuard was self-funded, but has since gone through one round of funding from angel investors for an undisclosed amount
What problem are you trying to solve?
To eliminate the worry associated with paying for vacation rentals – solving the problem for homeowners and businesses serving this market by standardizing the way money is handled for online home and vacation rental transactions.
DepositGuard delivers confidence for renters, homeowners and companies serving the vacation rental industry – and ultimately makes the vacation rental industry safer, more robust and more appealing.
DepositGuard protects the integrity of the contract entered into by the renter and the homeowner, providing a simple way to introduce new customers and add comfort for existing vacation rental customers.
Describe the business, core products and services?
A payment platform that is customizable for renters, homeowners, landlords, property managers, rental agents, travel agents, vacation rental sites and online travel agencies.
As a Software-as-a-Service (SaaS), DepositGuard operates a fully automated web-based service. The service can integrate into 3rd party rental listing sites and enables the renter and landlord to manage the flow of funds for online and “site unseen” rental transactions.
DepositGuard collects rental payments and security deposits, holds these monies, and disburses the funds to the landlord at specific, agreed-upon points in time.
Who are your key customers and users at launch?
We benefit every audience who touches the vacation rental transaction, including businesses that serve those in vacation rental businesses.
As well as all parties involved in vacation rental and short-term rental property transactions, including renters, homeowners, landlords, property managers, rental agents, travel agents, vacation rental sites and online travel agencies.
Did you have customers validate your idea before investors?
Yes. We conducted a consumer study and saw an immediate resounding agreement with our company’s premise. The need exists.
We are also renters and homeowners ourselves and our networks of friends and business colleagues are also in this area and our informal outreach proved to be very supportive.
What is the business AND revenue model, strategy for profitability?
DepositGuard has the unique competitive advantage of combining the proven revenue model of Airbnb with the proven distribution model of PayPal.
This allows the company to structure mutually beneficial relationships with the multitude of listing sites that are currently seeking ways to stay relevant in a rapidly changing industry.
DepositGuard collects a service fee from the renter based on the amount of the deposit at the time the deposit is made. If funds are deposited via MasterCard or Visa, the service fee is 2.99%. If deposited with eCheck, the service fee is 1.99%.
SWOT analysis – strengths, weaknesses, opportunities and threats?
Strengths:
- Understanding of this sector, technology and real estate expertise, platform experience from former business/real estate niche
Weaknesses:
Opportunities:
- Fragmented market, current solutions don’t solve comfort factor, need for standardization, exponential growth possibility when security and comfort are introduced intot he transaction
Threats:
- Do it yourselfers with no experience, making a black mark on reputable companies with escrow and operations experience
Who advised you your idea isn't going to be successful and why didn't you listen to them?The vast majority of feedback has been very positive, however, like any new business, we have had a few naysayers. One that comes to mind was an investment banker who is also a friend of ours. It was in the early stages and we wanted his opinion as someone who advises technology companies every day of the week.
He thought the vacation rental market was too fragmented and did not see the need for a better way to transact.
We value his opinion but chose not to listen to him because we saw the need from our first-hand experience dealing with vacation properties. We are still friends.
What is your success metric 12 months from now?
We will measure our success by the number of satisfied clients and partners we have and ultimately the number of transactions.
NB: TLabs Showcase is part of the wider TLabs project from Tnooz.