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Bilt Rewards’ valuation jumps to $1.5B following new $150M growth round • ZebethMedia

By zebethcontrolPosted on October 25, 2022Posted in Ankur Jain, bilt rewards, credit card, Fintech, Left Lane Capital, VentureNo Comments

Bilt Rewards, which works with some of the country’s largest multifamily owners and operators to create loyalty programs and a co-branded credit card for property renters, entered unicorn status after securing $150 million in a growth round led by Left Lane Capital. We previously covered Bilt a year ago when the company raised $60 million in growth funding on a $350 million valuation. Today’s investment raises that to $1.5 billion and gives the company about $213 million in total funding since the company launched in June 2021 out of Kairos, the startup studio led by Bilt founder and CEO Ankur Jain. The company’s loyalty program and payment platform was rolled out to more than 2.5 million apartment units across the country so far, Jain told ZebethMedia. Users can earn points and improve their credit by simply paying rent each month. Bilt’s points can be used in 12 loyalty programs, including major airlines, hotels, travel, fitness classes, Amazon.com purchases, credit toward rent or a future downpayment. Bilt has already processed over $3.5 billion in annualized rent payments and over $1.6 billion in annualized card spend to date. Both of those figures are ones that have grown significantly in just the last 90 days, Jain said. Also, there are more than half a million customers using Bilt between the loyalty program and credit card. In addition to the new investment, Bilt also announced a new program called Bilt Homes, which helps renters access homeownership. Here’s how it works: Using the member’s monthly rent payment, Bilt will show the member homes they can own in their area for that same payment. That payment includes real-time interest rates, taxes, income, credit profile and other personal data to determine mortgage qualification, Jain said. Members can also calculate how an improvement in credit rating will affect the mortgage interest rate they may qualify for, and should they need or want it, enroll in Bilt’s free rent reporting to help boost their credit history with every on-time rent payment. “It’s an opportunity for more renters to think about whether homeownership is the right thing for them at this moment in time,” Jain said. “It’s just so stupidly confusing to buy a home today, so we created the first tool where you can now just say, for $3,000 a month, what are the homes that I could buy today for the same amount?” Joining Left Lane in the investment was Wells Fargo, Greystar, Invitation Homes, Camber Creek, Fifth Wall, Smash Capital, Prosus Ventures and Kairos. Previous rounds were more strategic in nature, while this round was the first time Bilt had taken growth institutional capital, Jain said. He notes that the company wasn’t formally looking for new capital. In fact, it had hit profitability earlier this year. However, there was a lot of inbound interest in the company, and bringing on institutional investors like Left Lane Capital positioned Bilt to think more long-term, including a possible initial public offering or other future opportunities, for example, acquisitions. Also, having partners like Wells Fargo double down in this round “was a testament to the strength of the partnership,” as was attracting one of the largest multifamily owners, Greystar, and Invitation Homes, one of the largest single-family rental players, Jain added. Much of the new capital will be kept in reserves for now while the company is focused on aligning interests further with its core commercial partners. “Unlike a lot of the VC rat race businesses where you’re just chasing growth for the sake of chasing growth, we can just keep focusing on the core business and growth and think long-term here,” Jain said. “That’s our goal and a big reason why we raised the capital right now.”

This company wants to improve your credit by gamifying financial literacy • ZebethMedia

By zebethcontrolPosted on October 11, 2022Posted in arro, credit card, crosslink capital, financial literacy, Fintech, Ryan Duitch, VentureNo Comments

Qualifying for a credit card is not easy when you have a poor credit score or none at all, but Los Angeles-based fintech company Arro wants to help consumers grow their credit line while also teaching them why that’s important. This type of thing is not new; just look at Kikoff, Upgrade, Self Financial, Altro, Petal, X1 or TomoCredit. However, from Arro’s perspective, traditional lenders appeal to their bottom line, which doesn’t involve helping its customers stop the cycle of overspending or going into debt, Ryan Duitch, co-founder and CEO at Arro, told ZebethMedia. Duitch started the company with Luke Pelullo in 2021 to provide a credit card and credit-building platform that has a proprietary underwriting model that instead of relying on the FICO system, relies on income; for example, earning at least $1,000 a month in income. And, it secured a partnership with Equifax, so applying for an Arro Card has no impact on someone’s credit score. With Arro, for $3 per month, customers get access to features including account monitoring and spend tracking tools. The company also makes a small percentage of revenue from interchange fees when a customer uses the credit card. That’s also combined with financial literacy training and behavioral incentives. As the customer progresses through the in-app activities, like learning how to use credit responsibly and creating and meeting budget and savings goals, there are additional rewards like increases in credit line. The idea, Duitch told ZebethMedia, is from day one being able to increase your credit line by $20 or $30. Then in six weeks by another $100 and other quick successions for the first five months. But don’t call Arro a credit company, Duitch said. Rather, he referred to the startup as the “Noom of credit meets personal finance.” While other financial apps do help with short-term symptoms of debt, they also charge high interest and fees, he added. “We’re here to shake behavior and show that the system is broken for so many consumers out there,” he added. “We’ve created a handful of modules that train you on all the basics of what you should know, and by layering it with actions and behaviors, like budgeting, you nudge people to do something to spend less and save.” To keep the cascade of content going, Arro is partnering with academic professors on both the curriculum and behavioral science. The aim is to be able to provide some expertise on how the company is introducing its brand new variable of financial literacy into the underwriting equation. Arro is still very much in the early stages — it’s preparing for a launch this month after beta testing with “a handful of different customer groups.” Duitch declined to say how many are on the waiting list, but did say that its launch partners will put the app in front of about 5 million to 6 million of its target users. It also closed on $10 million in seed funding in a round led by Crosslink Capital. It was joined by a group of investors, including Bling Capital, Bam Ventures and Global Founders Capital. The company also has $75 million in debt capital. Most of the equity funding will be used to get the product live, work on operations, build out the team, technology development and having the right amount of runway to support customers, Duitch said. “For our early customers, we were using some of our own money to help build out the model,” he added. “As we train the model with data, we’re using a handful of both our own money and then debt to lend off to our consumers. After funding both operations and technology we will then make investments across a handful of areas that help us get there.”