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

While there are benefits to being a tenant – don’t think about maintenance headaches – many tenants still feel like they’re wasting money every month when making their rent payments.

A startup based in New Jersey Pinatais there to make renters feel rewarded and help build their credit and he just raised $13 million in Series A funding for the effort.

Launched 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 over 600% growth in new users, nearly 300% growth in new property management company partners, and 1,100% growth. of his income. Just over 220,000 tenants are actively using its platform, according to Piñata co-founder and CEO Lily Liu.

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

Picture credits: Co-founder and CEO Lily Liu / Piñata

Liu helped launch Piñata with the goal of finding a way for renters “to make the most of their biggest expense each month.” She notes that she herself has been a tenant throughout her adult life, and also a landlord.

“One of the biggest things I regret as a tenant is that all those long-term rents haven’t helped my credit rating. They haven’t resulted in any perks or perks. additional are equity-building opportunities,” Liu told TechCrunch. “And that’s really one of the biggest issues that all tenants now have on our platform — that even if they get a good deal on rent, they feel like it’s wasted money.”

Piñata wants to reward renters for making on-time payments by giving them in-app currency – called Piñata Cash – that they can spend on more than 300,000 different brands, including Amazon, Starbucks and Target, among others .

Picture credits: Pinata

The startup also offers tenants credit reporting options, so they can have their rent payment reported on time to credit bureaus to help improve their credit scores.

“So just like landlords with every on-time mortgage payment you build equity and you build credit history, with Piñata you can 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 opportunities. credit assessment”. Other platforms, she said, typically require a tenant to be listed through the property management company or landlord.

“On our platform, you can rent from anyone and be a direct-to-consumer renter and sign up for free to start using our program,” Liu explained. “You 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 benefits and rewards.

The start-up works with property management companies, which have the ability to add additional customer incentives and perks.

“While our program focuses on getting rents on time, they want to incentivize a whole host of other good tenant behaviors such as unit maintenance, early lease renewals, tenant referrals, investigations, etc.” Liu told TechCrunch.

Simply put, the company’s mission is to improve the financial lives of more than 100 million tenants in the United States. and improve the tenant-landlord relationship in the process, according to Liu.

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

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

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

“We felt that having an accessible reward platform for tenants was inevitable in many ways and that’s where the industry would naturally go,” he said. “Millennials and Gen Z are used to rewards for virtually everything they do – booking flights, hotels and even restaurants – it only makes sense that they now have the opportunity to be rewarded for their most big expense, the rent also.”

Piñata plans to use its new capital to improve its product by adding more financial features to its offering, such as additional benefits, rewards, and reporting opportunities. It also intends to increase its workforce, which currently stands at 27.

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

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

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