Protech startup Stake closed a $12 million series A funding round. The company offers cash back to renters, creating incentive programs that it claims provide more efficient and effective operations to owners and operators.
Leading the round was RET Ventures, choosing Stake as its first investment for its RET Ventures ESG Fund. Also involved were Enterprise Community Partners, which, since 1982, has helped create or preserve 873,000 homes; Hometeam Ventures; Operator Stack; and Second Century Ventures, the investment arm of the National Association of Realtors. Existing investors Shadow Ventures and Olive Tree Ventures also participated in the round.
The business premise is an unusual one for real estate. “Using Stake, property managers receive a 130% return on every dollar spent,” the release stated. “Renters earn an average of 4% Cash Back on their rent each month. Across the $385 million in annual leases connected to the platform, 65% of renters have more money in their Stake account than any other banking account. In the past year, the number of residences that offer Cash Back with Stake has grown by 10x.”
Clearly the point of Stake is not to pay money out with no return for itself. Renters get a Visa debit card issued through Blue Ridge Bank, N.A., a bank that has FDIC insurance and so even if Stake defaulted, renters would have access to their funds. There are cash back incentives both for taking certain actions, like signing a lease and paying rent on time, and using the debit card.
Property owners and operators seem to get their returns indirectly, through higher renewable rate and contactability and lower delinquency. However, there is also mention of “ancillary revenue” that is available to them. Perhaps that comes from a portion of the fees banks make on credit card network transaction fees for processing payments.
“Using Stake, property managers receive a 130% return on every dollar spent,” the release states. “Renters earn an average of 4% Cash Back on their rent each month. Across the $385 million in annual leases connected to the platform, 65% of renters have more money in their Stake account than any other banking account. In the past year, the number of residences that offer Cash Back with Stake has grown by 10x.”