With the aim of competing with BILT in the emerging real estate tenant bonus market, PeriodToday, the startup, which provides cashback and banking services to renters, announced that it has raised $12 million in a Series 1 round led by the new RET Ventures ESG fund, RET Ventures. Enterprise Community Partners, Hometeam Ventures, Operator Stack, Shadow Ventures, Olive Tree Ventures and Second Century Ventures, the investment arm of the National Association of Realtors, also participated, bringing the total stake to $17.9 million.
Co-founder and CEO Roland Hobbs says the new capital will be directed to expand the platform and increase Stake’s workforce from 17 employees to 23 by the end of the year.
“During the pandemic shutdown, we’ve seen renters really suffer, and landlords haven’t been able to collect the rent. The pandemic has changed real estate forever,” Hobbs told TechCrunch in an email interview. “Today, rent affordability is up front in every aspect Our current economic environment. Inflation and rising rents are crushing renters – and rising mortgage rates are turning more people into renters. On the other side of the coin, rising labor costs and payment arrears are hurting rents.”
Before starting Stake, Hobbs co-founded an integrated communications and marketing company, Post + Beam, and co-launched Linea, a mobile photo-sharing app organized around an animated slideshow of photos. Through Post + Beam, Hobbs consulted with banks and brands to create customer loyalty programs, and through this work he says he was an inspiration to Stake.
“Despite the large audience, brands won’t target renters. Banks certainly don’t cater to renters. However, housing is the biggest cost to consumers. It hurts. Huge unrequited spending,” Hobbs said. View hundreds of apartments to see what really matters to renters. On a hot August day, on a small tour of the sixth floor, the phrase of one of the tenants hit the house: “It’s money, you idiot.” This insight led to [Stake’s] Cashback rewards for renters.
Stake uses a “behavioral science” algorithm to suggest to landlords how much cash back they should reward tenants who pay rent on time or sign a lease renewal early. By integrating with property management software such as Yardi and Entrata, landlords can use Stake to activate “personal incentives” and targeted offers, Hobbs said, with the goal of reducing late payments.
Renters earn an average of 4% cashback on their rent using Stake. at the time Nearly three quarters Hobbs said that from tenants who have seen an increase in their rents and are considering making a move, it can make the difference between having to find a new tenant and keeping a tenant for the long term.
“Stake uses machine learning to help determine the appropriate amount of refunds to offer to residents. For example, if the data shows a decrease in the number of rental applications being submitted at a particular property, Stake often suggests an increase in the cashback being offered at that property,” he said. Hobbs. “Stake stores anonymous user data for the duration of its relationship with Stake and for as long as it is required to fulfill our legal and customer obligations.”
The fact that Stake stores personal data, albeit anonymously, may make some tenants uncomfortable. Aside from data retention, it is not clear to what extent Stake investigated the cashback account algorithm for bias. as such Reports She revealed that many of the algorithms that financial institutions use to make lending decisions are biased against minority applicants, in part because they reward traditional credit and don’t consider on-time payments for things like utilities and mobile phone bills.
Hobbes asserts that Stake advocates For renters, in fact, by offering loyalty solutions that boost savings. Unlike financial products that sell debt to tenants, Stake does not burden tenants with loans and fees. This is essential, he claims, at a time when real estate costs are rising at an average rate register Rate – even in stable units whose rents have historically been slow to change from year to year.
“Stake finds savings for the owners and then returns that money to the tenants so they can spend it on the things they want today and save for the life they want tomorrow,” Hobbs said. “Every major industry, from hospitality and travel to credit cards and finance, has used loyalty to lower the cost of marketing and increase lifetime value for customers. The bet is to bring the same transformation into real estate. But transformation takes time, and real estate decisions tend to be long-term. Our challenge is to keep going. in providing better data to help owners and operators shift to a loyalty mindset.”
In line with this mission, Stake has recently begun offering a range of banking services to tenants, including checking accounts with payroll, direct deposit planning features, and a debit card with cashback rewards. For many renters, Hobbs says, Stake’s is their first checking account.
As Stake competes against the aforementioned Bilt, which last year raised $60 million for its loyalty program for property tenants, Hobbs claims that Stake is growing at a solid pace. It is estimated that Stake now reaches about 20,000 homes across multi-family, single-family and student housing units in the United States
“We’ve made savings easy and intuitive for renters, and rewarded them. Stake has grown 10x in the past year and has grown 30% every month since it closed the initial round in September 2021, and booked annual revenue exceeded $2 million.” “With this new financing — combined with booked sales, strategic real estate investors, and lower acquisition cost — we have significant growth and are on track to empower tenants, reduce costs for owners, and build the next generation of rental financial infrastructure.”