Real estate fintech startup Whale announced Tuesday that it has raised a $4 million seed round to grow its rental security deposit management platform.
Proptech venture capital firm Camber Creek led the round with participation from Stackpoint, a venture studio dedicated to building and investing in real estate technology companies. Whale plans to use the funding for product improvement and new integrations.
Chicago-based Whale was founded in May 2022 and went live with its product in June 2024. The company offers renters FDIC-insured accounts for security deposits, providing visibility and instant access to their funds, while landlords are freed from administrative burdens, said Jamie Petraglia, founder and CEO of Whale.
Whale was conceived as a blend of fintech and proptech, said Petraglia, a 25-year veteran of finance and real estate.
“It was a combination of my experience as an equity option trader and then getting into proptech,” Petraglia said. “I saw the opportunity in security deposits that really no one else did — that there’s $60 billion of security deposits just sitting there. And I saw that in a different, innovative way — to rebuild the financial infrastructure around deposits.”
Whale is a departure from traditional multifamily security deposit management, he said.
“The difference here is that the landlord never touches the money,” Petraglia said of Whale’s business model. Instead, renters retain ownership of their security deposit in a lockable, high-yield, FDIC-insured savings account, while property operators are granted guaranteed access to the funds when needed.
Security deposits legally belong to residents — even when held by landlords — which is why state and local regulations exist to protect those funds. As a registered investment advisor (RIA) governed by the Securities and Exchange Commission, Whale brings deposits back to renters: in accounts owned by tenants, offering yields up to seven times the national average, full visibility into their funds, and instant access upon move-out (assuming the landlord doesn’t have claim to it).
“Once the resident puts their money into their own account, we send a digital confirmation back to the landlord,” explained Petraglia. “The landlord sees that they fulfilled the obligation of the deposit, but they never hold the money. So all the liability is off their plate. All the administrative work comes off their plate free of cost, and it becomes an amenity for the resident.”
Whale guarantees that money is quickly transferred to the landlord for damages or a broken lease, he added.
The startup makes money from the “spread of the interest rate,” said Petraglia. “We keep 1 percent of the spread of the interest rate. We don’t charge the resident or the landlord anything. We are a registered investment adviser. There is no other RIA in the proptech space.”
Petraglia also emphasized that Whale has a unique rent security deposit model in the industry.
“We are not an insurance provider or a surety bond,” said Petraglia. “I want to be very clear on that. And we are not a third-party deposit solution or third-party manager. We are truly in a lane of our own.
“The space has been a little bit flooded with surety bond products, which instead of paying the deposit, charge the resident a monthly nonrefundable fee, just so they don’t have to pay the deposit. We’re on buildings with them, but I don’t consider them competition whatsoever. They only adopt about 5 to 10 percent of the building. What I don’t like about them is that if there’s damage, the resident thinks they’re paying an insurance premium and there’s no insurance behind them. So when there’s damages, those groups go after the resident to pay the damages. I think it’s predatory.”
As for third-party managers of deposits, Petraglia said, “There’s absolutely no innovation within that group. All they’re doing is saying, ‘Hey, listen, we know deposits are tough to deal with. Move it over to us, and we’ll do it for you.’ I equate that to basically, ‘I should clean my house, but I don’t want to, so I’m going to hire a cleaning service.’ That’s what they do. They charge the resident and or they charge the landlord for that.”
More than half a million multifamily units nationwide are using Whale, including through institutional owners and operators such as Mill Creek, Berkshire Residential, Cardinal Group, Rudin and Urby.
“Modernizing the rental experience is a core theme Camber Creek has invested in and advanced — from how renters discover apartments, to reducing friction in tenant screening, to how rent is paid and how renter interactions are managed across the life cycle of a lease,” Alexandra Nicoletti, a partner at Camber Creek, said in an email to PropTech Insider. “There are billions of dollars in value in improving these processes. But marginal improvements don’t gain buy-in. What makes Whale so compelling is the magnitude of friction it instantly removes.
“Onboarding is simple, and once in place much of the administrative burden and compliance risk around security deposits disappear. Camber Creek looks for solutions that unlock disproportionate value while demanding very little from the customer. Whale clearly stands out.”
Philip Russo can be reached at [email protected].
