Stake, a fintech company that has developed a cash-back program for renters, raised $12 million in a Series A funding at an undisclosed valuation.
RET Ventures led the oversubscribed round, which comes on the heels of the New York-based firm’s $4 million seed raise, 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 previous backer, also participated.
Co-founded in 2018 by Rowland Hobbs and Jimmy Jacobson, Stake aims to bring the economics of sophisticated consumer loyalty programs to multifamily, single-family rentals and student housing — arenas where they have never taken root.
Stake serves both renters and landlords, but only the latter pays. It uses big data — individual behavioral data rather than cruder market data — to help owners set reward rates and adjust them periodically to levels that will induce renters to sign a lease and pay on time.
Hobbs described the platform as a “revenue management and promotional tool” with greater capability and nuance and the standard industry offer of one or two months’ free rent.
“You can measure exactly when a renter takes an action, and if that action is worth more than the amount that [the landlord] spent,” he said.
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Renters get as much as a 4 percent cash back, which can be saved or used for any consumer purchase — the platform includes no-fee banking services — while landlords improve leasing, retention and delinquency rates, according to the company.
It claims the reduced lease-up cost and increased revenue for landlords outstrip the service’s fees, which amount to 10 percent of the cash paid back to the renter.
“If you can get people to move in faster, you save days on the market. If you get them to renew, you reduce days on the market. If people pay on time, you reduce bad debt,” Hobbs said.
Landlords can use Stake’s dashboard to achieve other ends. Hobbs described the platform as a “magic wand” for the cohort — a tool not only to compel timely payment, but to encourage renters to perform routine maintenance, hire a particular pest control service, or upgrade their spaces with smart-home technology.
“If you can imagine it, we can do it, pretty much,” Hobbs said. “But we tend to target the things that are big money-making returns for the asset managers.”
Stake targets large institutional owners like Greystar and Great Jones, and its purview spans the Southwest, where it says it increased its door count tenfold over the past year to about 20,000. It plans to move into the Midwest and Pacific Northwest with the new funding, and expand its 17-member staff by about a third.
RET Ventures invested in Stake via its ESG fund.