Stake, a financial tech company that provides cash back and banking services to renters, raised $12 million in Series A funding to build out its platform and suite of solutions for renters and property owners.
The financing round was led by real estate technology investment firm RET Ventures and also included participation from Enterprise Community Partners, Hometeam Ventures, and Second Century Ventures, the investment arm of the National Association of Realtors, Stake said Monday.
“Unlike homeowners, renters rarely reap financial benefits from paying their homes and families who rent tell us they could use a little extra cash each month,” said Rowland Hobbs, co-founder and CEO at Stake. Hobbs added that the platform allows renters to build a “rainy day fund” by making their largest expense also their largest source of savings.
Founded in 2018, Stake provides an average of 4% cash back to renters when they pay monthly rent using Stake and offers a no-fee banking service, according to the firm’s website.
The company makes profit by charging a transaction fee for every cash back to rental owners and operators. In return, every $1 spent with Stake returns on average $2.11 to owners and operators by replacing marketing and unmanaged expenses, Hobbs said.
A total of $380 million leases are offered on Stake, the firm said. Renters that use Stake for their monthly payments are 50% less delinquent than those who don’t use the platform and result in 30% more rental renewals, according to the company.