The partnership between Ankur Jain’s Bilt Rewards and Wells Fargo was not built to last.
The bank ended its credit card venture with Bilt ahead of schedule, the Wall Street Journal reported. The partnership wasn’t supposed to end until 2029, but the program’s heavy losses caused the bank to reconsider, people familiar with the matter told the outlet.
The report came a day after a bullish announcement from Bilt. The platform said in a letter to customers on Thursday it had secured $250 million in a new fundraising round that tripled its valuation to $10.75 billion, and it would be ending its relationship with the bank.
A new card offering, developed with a fintech firm ironically named Cardless, is slated to launch in February, with benefits for rent and mortgage payments.
The new venture will include no-fee cards, along with two premium offerings that would run for annual fees of $95 and $495. The structure differs from the free card that helped the platform make waves. The Journal reported the bank had proposed new terms on the platform’s free card, including an additional annual fee of $250 to $300 for holders.
Bilt allows renters to pay rent and earn reward points while eliminating fees for landlords. Upon its launch in 2022, a $150 million fundraising round boosted the startup’s valuation to $1.5 billion and earned it unicorn status.
The partnership between the two sides began in 2022. Wells Fargo wanted to enhance its co-branded credit card business and thought the card would bring in clients who ultimately wanted to take out a mortgage with the bank.
But by mid-2024, it was reported that the bank was losing $10 million a month on the card because of the false prediction that cardholders would carry balances that would earn interest income for Wells Fargo; customers instead paid off their rent within days of using their cards. Kleber Santos, CEO of commercial lending for the bank, said on an internal call last year that Bilt was a reputational risk.
Bilt has partnered with major landlords like Greystar, Avalon Bay Communities and Related Companies. It also has an initiative with Invitation Homes, the single-family rental landlord, to allow renters to earn points on payments.
Jain appeared at The Real Deal’s New York City Real Estate Forum in May. At the time, he said the company was sitting on $400 million in cash, had been profitable or operating at break-even for the past three years and had global expansion ambitions.
This article has been updated with additional information on Bilt Rewards’ latest funding round.
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