Why We Invested In Jetty: Introducing a Real Estate Embedded Finance Platform to Our Portfolio
After several months of keeping our excitement under wraps, we can finally share about our investment in Jetty, which was announced this morning in combination with its new product Jetty Rent. Today’s news has several implications that we will explain further, but the key takeaway is that Jetty has established the first embedded finance platform for the home rental market that removes several chronic pain points for renters and property managers, and creates significant financial benefits for all sides of the ecosystem.
Since the beginning of Flourish Ventures, we have been passionate about the rental home space because of the massive potential impact that the right fintech innovations could have on the financial lives of over 100+ million residents who live in 45 million rented units across the U.S. With rent typically being the number one expense for this group of consumers, and the significant penalties they face when they miss a monthly deadline, providing them with more flexible security deposit and monthly payment options can make a huge difference. And if done right, this newfound flexibility can also improve the cashflows of property managers.
Jetty’s founders have an impressive understanding of the complexities in the rental ecosystem and a compelling vision for customer-centric financial solutions. Rather than create a single point product like other startups in the space, their vision was to create a sticky embedded finance solution that aligned the interests of property managers and renters, creating a virtuous cycle.
One of the first products they introduced was Jetty Deposit, which eliminates the need for upfront security deposits through an alternative solution that has the potential to free up $45B of cumulative rent deposits currently held in the U.S. Launched today, Jetty Rent provides on-time rent payments to property managers while giving renters a 25 day-window to make the payment. This new offering only allows renters to extend one month’s payment at a time, which must be paid before they can use the benefit later. This helps ensure that Jetty’s renter clients can improve their financial health -- a key component of our Fair Finance Principles.
Flourish has a global investment thesis on embedded finance, based on its profound potential to help the underserved populations across all continents. We’ve invested in Grab Financial in Singapore, Brimore and Aquaconnect in India, ShopUp in Bangladesh, Dinie and Heru in LATAM, MaxAB in Egypt, and now, Jetty in the United States.
We’re completely aligned with Jetty’s mission and focus on solving true pain points for the American renter. It is the only company that combines rental insurance, security deposit alternatives and rent flexibility. Through its unique consumer insights, differentiated pricing, increased consumer loyalty, Jetty has achieved a significant competitive advantage. Add to this, bundling these services is really hard to do, and property managers would rather not have a dozen small vendors to support them. Consequently, Jetty has become the top choice among property managers like AMLI Residential and Cortland which gives the company unparalleled access to renters that will help it grow its market share.
We’re very excited to partner with CEO Mike Rudoy and his team, and looking forward to the many other accomplishments the company will make in the coming months and years.