A valuation of $ 52 million appears for efforts at the conclusion of a $ 12 million Series A series

Less than a year after completing a $ 4 million seed round, the Tenant Refund Stake platform announced the completion of Series A totaling $ 12 million, and a valuation of $ 52 million, a valuation reported exclusively here. The round was led by RET Ventures, which included Stake as one of the first investments for their new ESG fund. Existing investors Shadow Ventures and Olive Tree Ventures participated in the round, as did Enterprise Community Partners, Blue Field Capital, Hometeam Ventures, Operator Stack and Second Century Ventures (the investment arm of NAR). Efforts are available in over 12,000 homes in Georgia and 8,000 in Texas, as well as smaller footprints in other markets where they plan to expand as a result of the new increase.

Stakes co-founder Rowland Hobbs’ previous work in the financial industry showed him how little attention was paid to the rental population, estimated at around 45-48 million people or 36% of US housing, and how difficult it was to deliver some large-scale population programs. .

“In the first 18 months of Stake, we tested different solutions in New York. I showed hundreds of apartments as a broker, and ran up and down stairs in hot August weather, “said Hobbs. After showing potential tenants different solutions that are similar to reward point models, it was not until a frustrated and angry tenant looked at Hobbs and said, “That’s the money, Stupid. “which led to Stake switching to a cashback model.

Tenants who use the Stakes platform have a Stake wallet that is similar to a regular checking account and debit card from which they pay the rent or most other expenses. For those who pay rent on time, they get an average of 4% cash back in their wallet. If they keep at least 80% of their money back in their wallet, they can receive an additional 1% of the rent as a bonus each month. These wallets can be linked to payroll deposits, Venmo, ACH payments or other typical deposit mechanisms. Although they do not pay interest, Hobbs describes them as “fair” bank accounts since they do not charge fees, even if the balance is zero, and several people are eligible for an account even if they have a negative financial history because it is the ability to keep additional funds in a deposit-like account. According to Hobbs, 25% of tenants use the Stake wallet as their primary checking account.

This application of an end-to-end fintech platform used in a real estate context has every promise of being proptech’s next big trend. Namely one that starts at ground level, instead of aiming to be an industry disruptor that has been the pattern so far in most property-focused startups. Fintech has suffered and needs new avenues for seeking income to stay viable, and housing has become so much more out of reach for so many more people that anything that lowers their costs will be seen as welcome relief.

“Part of the upward mobility is interacting with the financial system,” said Priscilla Almodovar, president and CEO of Enterprise Community Partners, one of Stake’s investors. Enterprise Community Partners is a national non-profit organization that focuses on rental housing for low-income or other high-need populations, such as the elderly or disabled.

“Homeowners have almost 40 times more wealth than a tenant,” says Almodovar. “But we also believe that we can not give up the idea that a tenant does not have the economic mobility path. We are about how [to] create that road, and it does not just have to be home ownership. Therefore, this is exciting for us. It is a solution to test whether a tenant can share in the property of the rental property they live in through this cashback. ”

For every dollar in cash, property owners receive an average of $ 2.11 in return, Hobbs said. This can be in the form of lower tenant turnover, increased timely rent payments, reduced promotional costs and generally lower overhead for rental administration.

“One thing Enterprise is doing,” says Almodovar, “is that we are trying to move the capital markets. We are trying to show investors that they can invest in these systems, which is why it is a good return on investment to have a more stable lease.”

Stake also uses machine learning and data aggregation on its models to define “how much money is required to achieve the action” as Hobbs describes it. They compare the behavior of tenants in studios versus the units with varying numbers of bedrooms, seasonal trends and anonymous consumption behavior based on income levels.

“We’re connected to the real estate management software,” Hobbs said. “We are the only group that can really tell you in an anonymous and aggregated way what tenants do and put it together into models that also show this returns money to you. For the owner, they will see that they come ahead. ”

Their analytics are also linked to listing sites, such as Apartments.com, and so far their data shows an ad with the words “Cash Back” receiving four times as many clicks as those without. “Not only does it get more clicks, but more qualified leads,” Hobbs said. “When we add a cashback reward, people say, ‘Oh, I get my money back if I pay on time.’ So you get an increase in people who have a higher propensity to pay.”

This increase in rental stability and putting cash back in the hands – or accounts – of tenants may have popular appeal given all the strains in the housing market, but Almodovar suggests that it has a greater ideal in its path. As she concludes:

“This is not about saying that cash back is going to replace being a homeowner, or that it is the end of everything and being everything. [But] we can not accept the idea that tenants can not be part of economic opportunities and have access to this innovation that is happening. “