Rhino has revealed it secured $95 million in funding, resulting in a company valuation of nearly $500 million. This investment round was spearheaded by Tiger Global, and Rhino characterized the funding as a “pre-IPO” move in a discussion with TechCrunch.

Rhino delivers an insurance solution for real estate businesses, enabling them to move away from conventional tenant security deposits and instead provide renters with an insurance option that offers comparable protection for a recurring fee.

Alongside the announcement of its funding, Rhino shared that its contracted Annual Recurring Revenue (ARR) has grown substantially in recent years, increasing from $4 million in January 2019 to $60 million in January 2021. This ARR figure signifies the anticipated revenue from properties with which Rhino has established contracts. During a conversation with TechCrunch, the company’s co-founder and chairman Ankur Jain indicated that this number is a conservative estimate.

TechCrunch interviewed Jain, who also serves as the CEO of Kairos, a company portfolio that encompasses the insurance startup, regarding the new investment. Jain explained that Kairos aims to reduce expenses for younger demographics. Rhino aligns with this objective, as the initial expenses associated with renting can be significant, and its service has the potential to lessen the reliance on renters possessing substantial upfront capital for the duration of their lease.

Jain explained that Rhino can benefit both property owners and renters by reducing the obstacles to securing a rental unit, thereby expanding the possible renter base. The reasoning is that a larger pool of potential renters could lead to increased occupancy rates.

Rhino’s business model appears to be financially sound. Jain informed TechCrunch that the COVID-19 pandemic did not result in negative contribution margins for its primary insurance product. Considering that some rapidly growing insurance companies have experienced histories of negative contribution margins, Rhino seems to be in a strong financial position. (TechCrunch verified that this outcome was inclusive of loss-adjustment expenses.)

This financial stability could potentially facilitate a public offering in the future. Jain conveyed to TechCrunch that the company’s new lead investor, Tiger, has extensive experience in guiding companies through the IPO process, a path that Rhino may explore within 12 to 24 months.

When questioned about alternative public listing options, the CEO stated that a traditional IPO is the preferred approach.

If the openness of a startup CEO discussing a potential public offering seems unusual, it’s worth remembering that Lemonade successfully went public in mid-2020 despite relatively modest revenues. Another new insurance provider, Root, also completed an IPO, although its stock performance has declined since. MetroMile, another startup in the insurance sector, is planning to go public through a SPAC merger.

Furthermore, an increasing number of startups are concentrating on similar challenges. The surge in insurtech activity appears to be continuing the momentum seen in 2020 into 2021.