Cash-for-Rent FinTech Firm Stake Netts $ 12M in Series A Round

Stake co-founders Rowland Hobbs and Jimmy Jacobson (LinkedIn, iStock)

Stake, a fintech company that has developed a cash-back program for tenants, raised $ 12 million in Series A financing at an undisclosed value.

RET Ventures led the oversubscribed round, which comes on the heels of the New York-based firm’s $ 4 million seed increase, led by Shadow Ventures, in September.

Other Series A investors included Enterprise Community Partners, Hometeam Ventures, Operator Stack, Second Century Ventures and the National Association of Realtors’ investment arm. Shadow and Olive Tree Ventures, another former supporter, also attended.

Stake was co-founded in 2018 by Rowland Hobbs and Jimmy Jacobson, and aims to bring the finances of sophisticated consumer loyalty programs to apartment buildings, detached houses and student housing – arenas where they have never taken root.

Stake serves both tenants and landlords, but only the latter pays. It uses big data – individual behavioral data instead of rougher market data – to help landlords set reward rates and adjust them periodically to levels that will get tenants to sign a lease and pay on time.

Hobbs described the platform as a “revenue management and promotion tool” with greater capacity and nuances and standard industry offerings of one or two months free rent.

“You can measure exactly when a tenant takes an action and whether that action is worth more than the amount [the landlord] used, he said.

Tenants get as much as 4 percent cash back, which can be saved or used for any consumer purchase – the platform includes free banking services – while landlords improve leasing, storage and default rates, according to the company.

It claims that the reduced rental costs and increased income for landlords exceed the service fees, which make up 10 percent of the cash paid back to the tenant.

“If you can get people to move in faster, you save days on the market. If you make them renew, you reduce days on the market. “If people pay on time, you reduce bad debt,” Hobbs said.

Homeowners can use the Stakes dashboard to achieve other goals. Hobbs described the platform as a “magic wand” for the cohort – a tool not only to force timely payment, but to encourage tenants to perform routine maintenance, hire a special pest control service or upgrade their seats with smart home technology.

“If you can imagine it, we can do it, pretty much,” Hobbs said. “But we tend to focus on the things that generate a lot of revenue for asset managers.”

Stake targets large institutional owners such as Greystar and Great Jones, and its area spans the southwest, where it says it has tenfold the number of doors over the past year to around 20,000. It plans to move into the Midwest and Pacific Northwest with the new funding, and expand its 17-members by about a third.

RET Ventures invested in Stake through the ESG fund.