Jetty Raises $23M to Empower Renters with Payment Flexibility

Jetty Secures $23 Million to Enhance Rent Payment Flexibility

Fintech firm Jetty, focused on providing renters with greater payment options, has successfully completed a funding round of $23 million. The investment was co-led by prominent financial institutions, Citi and Flourish Ventures.

Funding Details and Company History

This latest financing increases Jetty’s total funding to $78 million since its establishment in 2016. Participation in this growth round also included Credit Ease and K5. The company previously received backing from investors such as Farmers Insurance Group, Khosla, and Ribbit Capital.

A "Buy Now, Pay Later" Approach to Rent

The New York City-based startup, comprised of 100 employees, has developed a novel solution to assist renters in making timely rent payments. This offering mirrors the increasingly popular “buy now, pay later” (BNPL) model utilized by consumers for purchases both online and in physical stores.

Renters are enabled to pay their rent on the due date and then have a period extending to the 24th of the month to reimburse Jetty. Repayment can be made either in a single payment or through manageable installments. No interest or late fees are applied; instead, a monthly subscription fee, varying from $15 to $25 based on the renter’s individual risk assessment, is charged.

Cost-Effectiveness and Financial Impact

According to co-founder and CEO Mike Rudoy, the monthly subscription fee is significantly less than potential late payment penalties. He emphasized that approximately half of a renter’s average income is allocated to housing costs.

“Consequently, a financial service designed to offer flexibility in managing these substantial expenses, without incurring penalties, is a logical expectation,” Rudoy stated.

Distinction from Traditional BNPL

Rudoy clarified that Jetty’s offering is conceptually related to, but distinct from, conventional BNPL services. Jetty assumes full responsibility for the rent payment to property managers on the first of the month, ensuring they receive funds promptly.

Renters are then granted 24 days to repay Jetty according to a schedule that aligns with their financial capabilities.

Initial Launch and Public Availability

Jetty Rent was initially launched in partnership with Cortland, a major real estate investment, development, and management company, undergoing beta testing with residents across various properties.

The service is now being made available to the general public. Jetty Rent represents the newest addition to the startup’s existing platform, which also includes affordable renters insurance and security deposit alternatives.

Company Mission and Evolution

“Our core mission is to enhance the affordability and flexibility of renting,” Rudoy explained. “We are a financial services platform where each product we introduce aims to deliver value to both property managers and renters.”

With this expansion, Jetty is transitioning from being solely an insurtech company to also functioning as a lender. The company is facilitating these loans through a partnership with Cross River Bank.

Competitive Advantages

Rudoy believes the company’s comprehensive suite of products provides a significant competitive advantage. “We differentiate ourselves from other financial services companies addressing similar challenges,” he noted.

“We are unique in offering both a security deposit alternative and flexible rent payment options under one umbrella. This simplifies the decision-making process for property managers, streamlining integration and onboarding. It also reduces the number of brands renters encounter.”

Revenue Model and Partnerships

Renters directly cover the costs of all products, while property managers act as partners in their distribution. Jetty currently maintains agreements with property owners and managers overseeing over 2.2 million rental units nationwide.

Since 2017, the company’s property partner network has experienced an average year-over-year growth of 193% in contracted units, according to Alex Vlasto, VP of Marketing. AMLI Residential is another key partner alongside Cortland.

Industry Context and Future Outlook

Emmalyn Shaw, managing partner at Flourish Ventures, highlighted that over 70% of Americans operate on a paycheck-to-paycheck basis. “Stable housing is a crucial element in achieving financial security,” she stated.

Shaw added that Jetty is the only company providing a comprehensive suite of financial solutions for renters, encompassing rental insurance, security deposit alternatives, and now, rent flexibility. “Their unique consumer insights, differentiated pricing, and increased customer loyalty have resulted in a substantial competitive edge,” she explained.

Furthermore, Shaw emphasized Jetty’s unparalleled reach through partnerships with leading property management companies like Cortland.

Other startups innovating within the rental market have also recently attracted investment. Sugar, focused on creating interactive apartment communities, secured $2.5 million in seed funding. RentCheck, an automated property inspection platform, raised $2.6 million in seed capital.