[USA Today] Jetty aims to ease first-of-the-month anxiety with guaranteed, on-time rent payments

Originally posted on USA Today

A New York City fintech start-up aims to fix a common anxiety both landlords and renters often experience on the first of each month: the rent payment. Landlords wonder whether they'll receive it, and renters wonder whether they can pay it. Jetty offers a solution.

What's the scoop?
Jetty recently raised $23 million in a funding round co-led by Citi and Flourish Ventures, making the total funding raised by Jetty since its 2016 founding $78 million. Other investors who participated in this round include CreditEase and K5 Ventures.

What Jetty does
Jetty uses the "buy now, pay later" (BNPL) model, an alternative to credit cards. BNPL acts as a point-of-sale loan where shoppers – or in this case, renters – pay for their purchase in installments. BNPL is a $100 billion industry.

Renters who sign up for Jetty pay the company a monthly subscription fee that varies between $15 and $25 a month, depending on the renter's credit profile. What customers get for their money is guaranteed on-time rent payments every month.

Jetty pays the customer's rent to the landlord or property manager, and customers have until the 24th of the month to pay it back, either through a one-time payment or installments. If the renter defaults to Jetty, they won't be able to borrow for the following month.

At first, Jetty offered its service only to residents of Cortland properties. It's now also working with AMLI Residential and is available to the public, along with offering renters insurance (making Jetty an insurtech company also) and security deposit replacement. It offers its loan service through Cross River Bank.

Why tenants do this
Landlords generally don't accept rent in installments. Therefore, if the renter doesn't pay in full, usually on the first of the month, they're subject to late fees and possibly eviction. How much late fees are depends on the lease, and sometimes by state law. But it's safe to say that late fees are typically more than what Jetty charges its customers each month.

Even if the landlord doesn't charge late fees, a tenant who is habitually late paying rent might not be asked to renew at lease renewal time, and tenants usually understand this.

The Millionacres bottom line
Jetty provides a service that benefits both landlords and renters. It's not the only company of its kind. Flex, for example, does the same thing. Emmalyn Shaw of Flourish says that over 70% of Americans live paycheck to paycheck, and that's the market for Jetty.According to the National Multifamily Housing Council, 72% of apartment households paid rent as of Sept. 6 of this year, down from almost 94% who paid in August. These numbers also illustrate there's a market for people who need help paying the rent on time.