A Toronto-based startup focused on helping non-traditional renters access housing has successfully closed a $25-million Series A funding round, marking one of the largest proptech investments in Canada this year.
Padder, founded in 2024, has developed a platform that helps renters who don't fit the traditional employment profile – including gig workers, freelancers, recent immigrants, and students – secure rental properties by providing alternative income verification and rental guarantees.
The funding round was led by Toronto-based venture capital firm Inovia Capital, with participation from Real Ventures, BDC Capital, and several angel investors from the Canadian real estate and technology sectors. The company plans to use the capital to expand across major Canadian markets and enhance its technology platform.
"We're solving a massive problem in the Canadian housing market," said Sarah Kim, Padder's co-founder and CEO. "Traditional rental applications favour people with steady employment and perfect credit scores, but that's not reflective of today's workforce or new Canadians who are contributing to our economy."
The platform works by analyzing alternative data points including bank statements, tax returns, freelance contracts, and payment histories to create comprehensive rental profiles for applicants. Padder then provides income guarantees to landlords, reducing their risk while opening doors for qualified renters who might otherwise be rejected.
According to Statistics Canada, approximately 2.7 million Canadians work in the gig economy, while Canada welcomes over 400,000 new immigrants annually. Many in these groups face significant barriers when trying to rent housing due to non-traditional income sources or limited Canadian credit history.
"The rental market has been stuck in the past, relying on outdated criteria that don't reflect modern work arrangements," explained Chris Arsenault, partner at Inovia Capital. "Padder's approach not only helps renters but also gives landlords access to a larger pool of qualified tenants."
Since launching in Toronto in late 2024, Padder has facilitated over 1,200 successful rental applications and maintains partnerships with more than 300 property managers and landlords across the Greater Toronto Area. The company reports a 89 per cent approval rate for applications processed through its platform.
The startup charges renters a monthly fee ranging from $29 to $99, depending on the level of service and guarantee coverage. Property managers can access the platform at no cost, with Padder generating revenue through successful placements and ongoing guarantees.
Industry experts say the timing is ideal for such a service, as Canada's housing shortage has intensified competition for rental units while the workforce becomes increasingly diverse in employment arrangements.
"This addresses a real pain point in the market," said Michael Brooks, executive director of the Real Estate Investment Network of Canada. "Anything that can efficiently match qualified tenants with available housing while reducing risk for property owners is beneficial for the entire ecosystem."
Padder plans to launch in Vancouver and Montreal by the end of 2026, with expansion to other major Canadian cities planned for 2027. The company is also exploring partnerships with major employers and settlement agencies to reach more potential users.