Late rent payments are a problem not only for renters, who bear the cost of exorbitant late fees, but also for property owners, who depend on steady income. Jetty, a Silicon Valley-backed rental insurance provider, says it has a solution for both.
The company launched its new product, Jetty Rent, Sept. 8. For a fee of a few dollars, Jetty will cover rent on behalf of the renter, and the renter has until the 24th of the month to meet his or her obligations. Jetty Rent allows users to pay in installments.
The product comes at a pivotal moment in the housing market, as the federal eviction moratorium ends and laid-off or under-employed renters struggle to make ends meet during the pandemic’s long tail.
Roughly 54% of consumers in the U.S. — 125 million adults across a broad range of ages and incomes — live paycheck-to-paycheck, with little or no money left after spending their monthly income, according to recent research conducted by LendingClub Bank.
Jetty, which was founded in 2016 and completed a Series B round in 2019, raised $23 million in equity financing for the product launch, with backing from Citi and Flourish Ventures. The raise bring’s Jetty’s total funding to-date to $78 million.
Another startup called Flex offers a similar flexible rent solution. Jetty differentiates itself with more comprehensive financial services, including rental insurance and a security deposit alternative, CEO Mike Rudoy said.
Property managers want a one-stop solution, he said. “We are attempting to become the financial services platform for the entire rental real estate industry. Our partners have effectively called out for consolidation of products.”
The outlook for the business has not always been rosy. Jetty laid off 40% of its workforce across several departments in early 2020, just as the pandemic hit.
Today, the company’s headcount sits at about 100, Rudoy said. The new funds will be used to make new hires and build out the Jetty Rent product nationally. Jetty’s landlord and property manager client base, comprised mostly of large institutions, collectively own 2.2 million units.
Jetty will undertake a Series C round “in short order,” Rudoy said, declining to offer a specific timeline.
Keith Rabois’ Khosla Ventures led Jetty’s $26 million Series B round in 2019. Peter Thiel’s Valar Ventures also participated in the raise.