Following a 338 per cent increase in the total value of bonds written in the last 12 months, eGuarantee has raised $5.5 million.
Digital lease bond guarantees, eGuarantee, has momentous plans to capture over 5 per cent of the $10 billion commercial lease security market over 18 months using its new $5.5 million in raised capital.
Correlation, a global specialist insurance investor, has also increased its holding from 25 to over 60 per cent to support eGuarantee as it is rapidly adopted across more than 110 leasing landlords.
The landlords include Dexus, Vicinity Centres, Brookfield, Centuria, EG Funds, and AsheMorgan. The company also works closely with agents such as JLL, CBRE, Knight Frank, and Colliers.
Stephen Ellis, the executive chairman of eGuarantee – and former CEO of both CBRE and Knight Frank Australia – said the move follows “a year of significant growth within the business” and the capital “lets us scale fast to meet surging demand”.
“Real estate is a notoriously slow-moving industry, but landlords need to move fast to address antiquated bank guarantees.
“We are introducing lease bonds that cut risk for landlords and unlock cash for tenants. Instead of typing up as much as 12 months of rent in a bank guarantee, businesses can redeploy that money and secure a digital bond issued and managed online,” Ellis said.
“We believe the industry is ripe for disruption.”
The raised capital will also be used to scale landlord acquisitions and distribution, deepen its coverage worldwide, and support eGuarantee’s expansion into New Zealand over the next three years.
Correlation managing partner Lance Warner said the company “has high conviction” in the opportunity for lease bonds to replace bank guarantees in Australian commercial property.
“The product just makes sense for landlords and tenants alike.
“eGuarantee is executing with speed and quality, and we are increasing our stake to a majority position to support the team as they scale and capture this market,” Warner said.
