This startup wants to help tenants get rewarded for paying their rent on time – TechCrunch

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While there are perks to being a renter — think of no maintenance issues — many renters still feel like they’re throwing money away every month making their rent payments.

A startup from New Jersey pinatais designed to give tenants the feeling of being rewarded and are helping to build their creditworthiness and has just raised $13 million in Series A funding for this effort.

Founded in mid-2020, the startup partners with property management companies to make its services available to tenants. The company says that from January 2021 to January 2022, it saw more than 600% growth in new users, nearly 300% growth in new property management company partners, and 1100% revenue growth. According to Lily Liu, Piñata’s co-founder and CEO, just over 220,000 renters are actively using the platform.

In an interview with TechCrunch, Liu said the startup is “the first and only service” to report tenant payments to the major credit bureaus for free (more on that later). Its goal is to close the credit discrimination gap for renters, many of whom have historically found it difficult to save for a down payment and build their creditworthiness enough to qualify for a home loan.

Photo credit: Co-founder and CEO Lily Liu / Piñata

Liu helped found Piñata with the goal of providing renters a way to “get more out of their largest expenses every month.” She notes that she herself has been a tenant and also a landlord throughout her adult life.

“One of the biggest regrets I have as a renter is that all those long-term rent payments didn’t help my credit score. They haven’t resulted in additional perks, or the benefits are equity building opportunities,” Liu told TechCrunch. “And that’s really one of the biggest pain points that all renters have on our platform now — that even if they get a good rental offer, they feel like the money is going down the drain.”

Piñata wants to reward renters for making payments on time by providing them with an in-app currency – called Piñata Cash – to spend on over 300,000 different brands, including Amazon, Starbucks and Target, among many others.

Photo credit: pinata

The startup also offers tenants credit reporting options so they can report their on-time rent payments to the credit bureaus to improve their credit score.

“Just as homeowners build equity and build credit history with every on-time mortgage payment, Piñata lets you do the same with your rent payment,” Liu said.

While other companies also offer tenants the ability to have their payments reported to credit bureaus, Liu believes Pinata is “the only platform that gives all tenants access to free rewards and credit reporting opportunities.” Other platforms, she said, typically require a tenant to be registered through property management or the landlord.

“On our platform, you can rent from anyone and be a direct renter and sign up for free to start using our program,” Liu explained. “They don’t pay rent through our platform, but we just need the data showing that a tenant has paid rent. And then we process all the perks and rewards.”

The launch works with Property management companies that have the ability to add customer incentives and additional perks.

“While our program focuses on getting rent in the door on time, they want to encourage a whole range of other good tenant behaviors, such as: B. Unit maintenance, early lease renewals, tenant referrals, surveys, etc.

Simply put, the company’s mission is to improve the financial lives of more than 100 million renters in the US. while improving the tenant-landlord relationship, Liu said.

The business model of the startup is versatile. It generates revenue from the property management companies and landlords who sign up for a customizable premium program via a monthly service subscription. It also generates revenue through brands and partners on the business development side of what it does via fees.

Piñata previously raised $7 million in seed funding. Wilshire Lane Capital led its most recent round, bringing the total to $20 million.

Adam Demuyakor, Founder and Managing Partner of Wilshire Lane Capital (which recently closed on its debut $40 million fund), said his firm was “immediately impressed” by Piñata’s user growth and drawn to the fact that his platform is open to all renters and not limited to working with specific landlords.

“We felt that in many ways an accessible tenant rewards platform was inevitable and that’s where the industry would naturally go,” he said. “Millennials and Gen-Z are used to rewards for pretty much everything else they do — book flights, hotels, and even restaurants — it only makes sense that they now have the option to get rewards for their biggest expense, rent, too will. ”

Piñata plans to use its new capital to improve its product by adding more financial features to its offering, such as B. additional perks, bonuses and reporting options. The number of employees, which is currently 27, is also to be increased.

Interestingly, Liu began her career in government and politics, working on special projects for Mayor Bloomberg’s office before founding her first company, a citizen app maker called Public Stuff. This company built web and mobile tools for 311, which eventually landed large commercial buildings as users.

In 2015, a “govtech” startup called Accela Purchased PublicStuff in a cash and stock deal at an undisclosed price. But it was this exposure to commercial real estate that inspired Liu to co-found Piñata.

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