Revolutionizing Rent Payments— Bilt's $3.1B Valuation

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Good morning! It's Thursday, February 29th. Today, we’re breaking down Bilt, a $3.1B credit card company changing how Americans pay rent!


Revolutionizing Rent Payments— Bilt's $3.1B Valuation

On average, Americans spend over 30% of their income on rent, totaling over $700B each year. 

Despite the high costs and regular payments associated with renting, consumers generally can't use those payments to boost their credit or earn rewards... until now. 

Bilt Rewards offers credit card products and rewards programs tailored to renters' needs, resulting in a recent $200M funding round and $3.1B valuation!

The Founder

Ankur Jain, the founder of Bilt Rewards, is 34 years old but is already a veteran entrepreneur. 

After graduating from Wharton in 2012, Jain launched Kairos Society, a $25M startup incubator. By 2017, Kairos Society's startups had raised $600M in capital and reached a combined $2.5B valuation!

In 2016, Jain created his own startup, Humin, a networking tool that organizes phone contacts based on how you know them. 

Within a year, Tinder acquired Humin for an undisclosed amount and recruited Jain as a VP to build Tinder Select, an exclusive version of the app geared towards celebrities. 

When using credit card points to book a flight in 2017, Jain had a lightbulb moment. If the benefit of credit card points were extended to rental payments, he and countless other Americans would have substantially more financial flexibility. 

So, What's the Business?

Launched in 2021, Bilt has paved a new way for Americans to pay rent, build credit, and become homeowners. 

Like other card providers, Bilt users can use points on things like flights, hotels, fitness classes, or retailers like Amazon. One of Bilt's primary innovations is that it expanded the traditional rewards framework, allowing points to function as credit towards rent or a future home down payment.  

The success of Bilt's business model rests on the Bilt Alliance, a network of partnered rental property owners across the country. In 2022, 2.5M apartments were a part of the Bilt Alliance. Today, that figure is up to ~4M

Rental property owners join the Bilt Alliance to access a broader pool of potential tenants. Bilt isn't just a credit card company but a platform for landlords to advertise to renters through its app and other channels. As such, Bilt generates a sizeable portion of its revenue from referral fees, while other credit card companies primarily rely upon interchange fees and interest charges.

Cardholders living in Bilt Alliance apartments can pay rent seamlessly through the Bilt app and earn a minimum 250 points a month for doing so. 

Bilt members who don't live in partnered apartments can still use an online portal to pay rent with their card— though they don't receive the free monthly rewards. However, they can still earn points for paying rent and typical daily purchases. 

Bilt's annualized member spend is nearing $20B, and the company became profitable in 2023!

Key Observation: Regulation as a Competition Filter

With any great business idea, it's typical for people to consider, "Why didn't anybody think of that before?" In most cases, plenty of people have thought up those great ideas, but most don't execute on them due to fears of traversing regulatory hell. 

One of Bilt's core founding missions was to create a rewards program that could go towards owning a new home. That mission was nearly killed by strict FHA rules on what kind of funds can go towards a down payment. 

After petitioning regulators for 18 months, the FHA authorized Bilt's rewards as a new form of savings in 2019. 

While it is difficult for an innovative company to succeed in a heavily regulated industry, it does provide a massive benefit: reduced competition. When an innovative company builds a stellar legal team, overcomes regulations, and makes it out the other side, they are head and shoulders above its competitors, hoping to do the same. 

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