Jon Bayle
Title: Founder and CEO, Deposify
Age: 38
Experience: 10-plus years in M&A law, three years in fintech

Before he founded Deposify, Jon Bayle worked as a mergers and acquisitions lawyer for more than a decade, mostly dealing with tech companies. As an M&A lawyer, he often acted as an escrow agent and that experience ultimately inspired his idea to use technology to automate escrow. That’s the basic concept behind Deposify, which freezes a tenant’s security deposit in an escrow account until it’s time to release it and provides a mobile platform to resolve landlord-tenant disputes. Originally launched in Dublin three years ago, Bayle now sees an opportunity to expand his idea into the U.S. – beginning with Boston.

Q: Why did you choose Boston for Deposify’s U.S. headquarters?

A: It’s a mix of personal and professional, really. My mom’s actually American. Her family is all from Worcester, so there’s kind of an association with family.

Then, there’s a variety of things, in no particular order. It’s a university town. Something like 25 percent of students in North America are in the Greater Boston area. In our market, students are key as a group in Ireland. Being around tenants who tend to churn every year or nine months, who tend to have problems with deposit retention, resolving disputes, etc., is key. That’s a very fine business opportunity for us here.

We’re a company that looks at cities, not countries, so we look for key demographics. The volume of users, the value of the deposits and the regulatory environment. And the regulatory environment in Boston favors our solution, where a landlord is obliged to create a trust account. What we do is give that landlord a trust account, mobile first. Say you’re an accidental landlord with one property, two properties, three properties; you can just open your phone and return the deposit without having to take out cash or create a check or visit your local bank.

If you take a security deposit and you’re a landlord in Boston, you assume a high level of compliance obligations and if you misstep you can be liable for three months’ mandatory damages. Our solution, to the extent that we can automate the compliance obligations of landlords, we automatically repay the deposit after 30 days from the termination of it. We keep landlords compliant and we think that’s a key value proposition.

So going back to your original question, the business opportunity is superfluous, the regulatory environment is great here, Boston is a pro-business and pro-Irish business town. It’s a well-traveled path for Irish companies to come into Boston first. I have a network of contacts here as well. The professional services and the support services here are first-class, too. So there’s a lot of value here that makes Boston a really good first U.S. city to launch.

Q: What do you think about the landscape where banks versus fintechs are concerned?

A: I think five years ago, three years ago, everybody thought fintech was going to completely disrupt banking, that banks were going to be under a lot of pressure.

I think what [fintechs are] finding is that banking is really hard and that banks have these legacy systems that even new banks need to take on. They’ve got to acquire customers and that’s really hard. The banks have the customers, and they have the industry expertise, and they also have the balance sheets.

If I’m a top tier bank, I can raise money cheaply. If I’m an early stage peer-to-peer [lending] company, it’s going to cost me a lot of money, which means I have to charge higher interest rates, which means I’m less competitive relative to the banks. So what we find is that our service is complementary to the bank’s offering. It allows the bank to innovate outside of its own systems, so we can move that a little bit quicker and we can be a little bit braver. Our offering delivers deposits to the bank, which is kind of central to what they do.

So we’re not a fintech that competes with a bank, we’re a fintech that’s complementary to the bank. And I think we’ve settled down now a little bit into what fintech is going to look like, and I don’t think it’s going to be that radical disruption. Fintech players, I think, will continue to work with the banks.

Q: Do you find that landlords often have any common misperceptions or misunderstandings about their compliance obligations?

A: I think generally, it’s complex. And it’s not that there’s one or two things you need to do. It’s that there are 10 things you need to do and you need to do them at particular times and in particular orders, so unless you’re an industrial landlord who’s got the machinery built around you, I think it is a briar’s patch and we try to smooth it out. It’s complicated and if you’re not taking appropriate advice, it’s possible to accidentally misstep, without meaning to.

If you get into a dispute, as an example, and the forms are prescribed that you need to deliver, and I think in one example, the landlord had not dated the form and despite the fact that he’d been compliant all the way through however many years, just this last piece at the very end tripped him up and he was found liable for damages, so we’re trying to smooth it out.

Bayle’s Top Five Favorite Things About Boston:

1. Enjoying a pint of Guinness at Mr. Dooley’s
2. The view of Boston from Sullivan & Worcester’s offices at Post Office Square
3. Fenway Park in the summer for an evening game
4. Coffee in Ogawa on Milk Street
5. Breakfast in Mul’s Diner in South Boston