Padder Underwriting Inc., a Toronto-based startup, plans to expand its insurance-backed guarantor model across Canada’s rental markets and focus on product development after raising a $2.5-million seed funding round.

Founded in 2023 by CEO Daniel Moss, who helped grow commercial insurance brokerage Zensurance, the firm's flagship product is named Padder Guarantor. Renters who are struggling to be approved by a building owner can have their lease guaranteed by Desjardins subsidiary ICPEI, improving the odds of signing the contract.

The regulated insurance brokerage says it is the first in Canada to offer a guarantor-as-a-service insurance product, though this type of service is already available in the U.S. and the U.K.

As a renter and building owner, Moss said he understands the issues faced by both sides, which led him to bring the model to Canada. Building owners, he said, have not adapted their requirements for approving renters with newer forms of employment, and an economy in which rents rise faster than incomes.

“I saw too many renters who should have been great on paper that weren’t getting a fair opportunity,” he said in an interview with RENX. “And I didn’t think that the industry has kept up with the way that the modern person earns income and is able to afford their home.”

How Padder Guarantor works

Padder Guarantor was made to accommodate new Canadians, the self-employed, students, first-time renters and workers who do not earn a regular – i.e. weekly or biweekly – paycheque.

As such people often find it difficult to meet the typical criteria for being approved as a tenant, including single-source income and strong credit scores, they are frequently locked out of renting markets. It also means building owners spend more time and money trying to find the right tenant.

A renter can sign up for Padder Guarantor and answer questions about a lease agreement. The application is reviewed with artificial intelligence-powered underwriting, which considers thousands of data points related to the person’s financial behaviour and income patterns, the location and the building.

If approved by Padder, the prospective tenant purchases a licensed insurance product with ICPEI to protect the rent for the first three years, and can reapply for the lease with a Padder guarantee.

Padder can “empower tenants to get access to their new home and give them a second chance that they otherwise might not have been able to get without our product,” Moss said.

If the tenant fails to pay rent on time, Padder covers the building owner for the unpaid rent and the tenant is liable to repay the insurer the remaining balance.

Helping hopeful tenants and building owners

The insurance-backed guarantor model can help get more aspiring renters into the home of their choice, Moss said, and reduce the hassle of finding a cosigner.

Building owners benefit by having a wider pool of tenants from which to draw, who may not meet traditional requirements but are otherwise qualified. Moss gave examples of a single parent who freelances for a living, or seniors with substantial savings but no steady income.

Padder approves over 85 per cent of its applications, Moss said, and can shorten the time building owners take to rent their properties by approximately 30 per cent.

“Now they’re able to do less tours, spend less money on marketing, get someone into their space quicker so they’re not losing out on potential revenue,” he said about its service.

How Padder is spending its seed funding

Padder has piloted its service in Ontario since September 2025, partnering with companies like purpose-built rental developer Fitzrovia and Campus Living Centres. To date, the service has guaranteed over $1 million in rents and has seen the pace of lease-ups accelerate, Moss said.

The company “gives us the ability to approve additional renters,” Adrian Rocca, founder and CEO of Fitzrovia, said in a release.

The seed funding it raised was led by Toronto-based Exit North Ventures with participation from fellow Toronto company Westdale Properties and other investors. Padder intends to use the money to invest in its product, and build relationships with building owners and property managers.

Moss aims to have his company operating Canada-wide in the next 18 months.