Bilt Rewards banks $60M growth on a $350M valuation to advance credit card benefits for renters

Bilt Rewards, a loyalty program for property renters to earn points on rent with no fees and build a path toward homeownership, announced Tuesday a round of $60 million in growth funding that values the company at $350 million.

The investment comes from Wells Fargo and Mastercard and a group of the nation’s largest real estate owners, including The Blackstone Group, AvalonBay Communities, Douglas Elliman, Equity Residential, GID-Windsor Communities, LENx, The Moinian Group, Morgan Properties, Starwood Capital Group and Related.

Bilt launched back in June out of Kairos, the startup studio led by Ankur Jain, focused on enabling over 109 million renters in the U.S. to earn points from paying their rent every month — typically someone’s largest monthly expense. Since then, the program was rolled out across over 2 million rental units, Jain told TechCrunch.

“We are the first and only alliance of the major property owners to create this kind of program and already have 15 of the top 20 owners involved,” he added. “We are also the only co-branded card to offer points on rent.”

Greg Bates, GID president and CEO, said his company has 130 assets spread across the top 20 markets and manages 40,000 apartment units. He learned about Bilt from a colleague who attended a proptech conference where Jain demoed the Bilt card.

For as long as Bates has been in the real estate industry, about 20 years or so, renters have wanted to pay rent with a credit card for convenience and to earn loyalty points. However, that was cost-prohibitive in terms of the surcharges needed to be added to the rental rate — until Bilt, he said. The card “is incredibly easy to use” and integrates into property owners’ online payment systems.

“Bilt has transformed the value proposition for residents that want to use a credit card and for landlords that want to accept them,” Bates added. “There will always be barriers to entry for products like this, but Bilt spent time with Mastercard and Wells Fargo to develop this unique product which will be a competition differentiator for a few years to come.”

In addition to the new funding, Bilt is also announcing new benefits for its loyalty members and upgraded offerings for the Bilt Mastercard, including the ability to earn up to 50,000 points on rent per year and unlimited points using the credit card.

For members, Bilt will pay interest in the form of points for a member’s account each month based on their average daily points balance over the 30-day period, and offer a concierge service for members choosing to redeem their Bilt points toward a home down payment. In addition, members can earn bonus points on top of points used by landlords on new leases and renewals.

Bilt worked with regulators, as well as Fannie Mae and the Department of Housing and Urban Development, to gain approval for using rewards points toward a mortgage. Members can also report their rent payments to the credit bureaus at no cost, which can help build credit history for millions of young renters.

Meanwhile, the company’s new “0-1-2-3” point earning structure for Bilt Mastercard holders provides no annual fee, 1x points on rent payments, 2x points on travel, 3x points on dining and 1x points on all other purchases.

This is the company’s first major external financing round and will be used to expand its real estate and loyalty partner network, grow its distribution channels and make its platform credit card more widely available to the public. Jain estimates Bilt is seeing 20% enrollment across residents.

As more renters move to homeownership over time, Bilt has plans to leverage this potential larger business to eventually become a mortgage provider for them.

“Renting is something people do for a while, and the core business has a massive scale opportunity, especially in the demographic under 35 years old, who tend to be up-and-coming professionals,” Jain added. “This is a unique target market, and Bilt will grow with them as they build their path to homeownership.”

 


By Christine Hall

“Rent tech” focused RET closes first fund; pours $5M into management platform SmartRent

Today, Real Estate Technology Ventures (RET) Ventures announced the final close of $108 million for its first fund.  RET focuses on early-stage investments in companies that are primarily looking to disrupt the North American multifamily rental industry, with the firm boasting a roster of LPs made up of some of the largest property owners and operators in the multifamily space.

RET is one of the latest in a rising number of venture firms focused on the real-estate sector, which by many accounts, has yet to experience significant innovation or technological disruption. 

The firm was founded in 2017 by managing director, John Helm, who possesses an extensive background as an operator and investor in both real estate and real estate technology.  Helm’s real-estate journey began with a position right out of college and eventually led him to the commercial brokerage giant Marcus Millichap, where he worked as CFO before leaving to build two venture-backed real estate technology companies.  After successfully selling both companies, Helm worked as a Venture Partner at Germany-based DN Capital, where he invested in companies such as PurpleBricks and Auto1. 

Speaking with investors and past customers, John realized that there was a need for a venture fund specifically focused on the multifamily rental sector.  RET points out that while multifamily properties have traditionally fallen under the commercial real estate umbrella, operators are forced to deal with a wide set of idiosyncratic dynamics unique to the vertical.  In fact, outside of a select group, most of the companies and real estate investment trusts that invest in multifamily tend to invest strictly within the sector.

Now, RET has partnered with leading multifamily owners to help identify innovative startups that can help the LPs better run their portfolios, which account for nearly a million units across the country in aggregate.  With its deep sector expertise and its impressive LP list, RET believes it can bring tremendous value to entrepreneurs by providing access to some of the largest property owners in the US, effectively shortening a notoriously lengthy sales cycle and making it much easier to scale.

Photo: Alexander Kirch/Shutterstock

One of the first companies reaping the benefits of RET’s deep ties to the real estate industry is SmartRent, the startup providing a property analytics and automation platform for multifamily property managers and renters.  Today, SmartRent announced it had closed $5 million in series A financing, with seed investor RET providing the entire round. 

SmartRent essentially provides property managers with many of the smart home capabilities that have primarily been offered to consumers to date, making it easier for them to monitor units remotely, avoid costly damages and streamline operations, all while hopefully enhancing the resident experience through all-in-one home controls.

By combining connected devices with its web and mobile platform, SmartRent hopes to provide tools that can help identify leaks or faulty equipment, eliminate energy waste, and provide remote access control for door locks.  The functions provided by SmartRent are particularly valuable when managing vacant units, in which leaks or unnecessary energy consumption can often go unnoticed, leading to multimillion-dollar damage claims or inflated utility bills. SmartRent also attempts to enhance the leasing process for vacant units by pre-screening potential renters that apply online and allowing qualified applicants to view the unit on their own without a 3rd party sales agent.

Just like RET, SmartRent is the brainchild of accomplished real-estate industry vets. Founder and CEO, Lucas Haldeman, was still the CTO of Colony Starwood’s single-family portfolio when he first rolled out an early version of the platform in around 26,000 homes.  Haldeman quickly realized how powerful the software was for property managers and decided to leave his C-suite position at the publicly-traded REIT to found SmartRent.

According to RET, the strong industry pedigree of the founding team was one of the main drivers behind its initial investment in SmartRent and is one of the main differentiators between the company and its competitors.

With RET providing access to its leading multifamily owner LPs, SmartRent has been able to execute on a strong growth trajectory so far, with the company on pace to complete 15,000 installations by the end of the year and an additional 35,000 apartments committed for 2019.  And SmartRent seems to have a long runway ahead.  The platform can be implemented in any type of rental property, from retrofit homes to high rises, and has only penetrated a small portion of the nearly one million units owned by RET’s LPs alone.

SmartRent has now raised $10 million to date and hopes to use this latest round of funding to ramp growth by broadening its sales and marketing efforts.  Longer-term, SmartRent hopes to permeate throughout the entire multifamily industry while continuing to improve and iterate on its platform.

“We’re so early on and we’ve made great progress, but we want to make deep penetration into this industry,” said Haldeman.  “There are millions of apartment units and we want to be over 100,000 by year one, and over a million units by year three.  At the same time, we’re continuing to enhance our offering and we’re focused on growing and expanding.”

As for RET Ventures, the firm hopes the compelling value proposition of its deep LP and industry network can help RET become the go-to venture firm startups looking to disrupt the real estate rental sector.


By Arman Tabatabai