Stake – Cash Back Rewards For Rent Payments and Banking

Financial technology startup Stake announced they just raised a $12 Million dollar Series A round of funding to continue developing their suite of renter-centric financial products. The startup launched in 2018 and is targeting the lucrative space of renter loyalty rewards.

Who is Stake?

Stake is a startup that was founded in 2018 and offers a series of innovative financial products that allure both renters and property owners. Their trademarked “Return on Rent™” targets renters with a cash back product for rent payments, as well as landlords with an incentive program that financially rewards favorable tenant behavior such as signing new leases, renewals and making on-time rent payments. For now, their target market is primarily residential apartment rentals, which they estimate to be worth over $500B in annual rent payments in the United States alone.

How Does Stake Work?

Stake’s value premise identifies potential savings for owners and then shares a portion of those savings with renters in the form of cash back. The cash back is technically paid by property owners, however it comes in the form of a percentage of the money property owners saved by using the platform. In theory, this type of setup is a win-win since the renter is receiving money that the property owner would have otherwise “lost”.

The secret sauce technology behind this platform uses machine learning to analyze renter data and an algorithm to suggest to property owners how much cash back they should reward renters who pay rent on time or sign an early lease renewal. Stake can be integrated with existing property management softwares such as Yardi and Entrata.

For Renters

Renters access the platform via a “Resident App”, where there are no-fee banking products such as checking accounts and a debit card with cash-back rewards. There is also a Stake Visa® Debit Card that provides renters with cash back as a percentage of their paid rent. Stake claims that Renters earn an average of 4% Cash Back on their rent each month. It is important to note that the app does not support rent payment collection; tenants should make these payments as instructed by property management. Property managers simply notify Stake is payments are made on time.

For Operators

Property operators (or property managers) access the platform via a back-end dashboard called “Loyalty Cloud”. In this dashboard, managers can start new lease signings or lease renewals, and monitor tenant financial insights to review potential cash back recommendations. Stake claims that property owners see an average of 130% return on every dollar spent.

“Renters don’t need more debt or loans – What renters need is money to help with everyday essentials and to establish long-term savings. With Stake, we have reimagined the classic ‘rainy day fund’ for renters to build the sort of wealth traditionally associated with home ownership. Now, their largest expense is also their largest source of savings.”

Rowland Hobbs, Co-Founder and CEO of Stake

Future of Tenant Rewards

The demand for Stake’s product is real. Since it’s Seed Round in 2021, Stake has grown 10X, with 30% growth every month and annual recurring revenue of over $2 Million. However, Stake is not alone in the competition to deliver innovative financial incentives to renters. Their competition – Bilt, raised $60 million financial heavyweights such as WellsFargo and Mastercard, as well as a group of the nation’s largest real estate owners. Nevertheless, the growing user adoption and investor dollars pouring in show that this new space of renter loyalty rewards has a bright future for both tenants and property owners.

Published by Ryan Nelson

Ryan is an experienced investor, developer, and property manager with experience in all types of real estate from single family homes up to hundreds of thousands of square feet of commercial real estate. He started with the simple objective to make investing and managing rental real estate easier for everyone through a simple and objective platform.