Controversial startup Rentberry, a company founded in 2015 that allows renters to compete in an auction for rental properties, which launched stateside earlier this year, might yet offset some of its perceived negative qualities.
Nearly half a trillion dollars in the world are tied up in rental security deposits. That’s a lot of cash.
Engineers at Rentberry, according to CEO Alex Lubinsky, are working to build out functionalities leveraging blockchain technology to create a platform where users can ask community members to help front their rental security deposits—freeing up some of those dollars for precisely the people who most need to access them.
In exchange, community members who help cover the renter security deposit will receive a return of a set interest rate to be paid back by the renter over time. The interest can be seen, in essence, as a charge of three to five percent fee on their ability to access that $500 or $1,400 that would otherwise be tied up in a rental security deposit. Lubinsky pointed out that you won’t find that kind of rate with any credit card.
“On average, we feel it will be around five percent,” Lubinsky said. “To give you an example, 1,000 bucks or like 2,000 dollars, you would pay $9 per month, or like $8 per month, which is very small. So you can unfreeze $2,000 for $8 per month. Who else can give you this kind of deal?”
Secondary to helping free up money for renters, Lubinsky said he thinks this is a good opportunity for people wary of exposing their savings to the volatility of the stock market. While the return on the investment won’t be as great as the traditional stock market, the return on this community backing program will be much greater than the return on an average savings account.
The fee will work on a sliding scale for renters, Lubinsky explained—renters with healthier credit histories will receive lower interest rates than others. And, the community bakers willing to take on the riskier renters will receive the best interest rates as a reward.
Currently, Rentberry has over 100,000 users and 200,000 rental properties registered in the U.K. and the U.S. Rentberry just closed a seed round funding of $4 million with investments from venture capital and angel investors, including 808 Ventures, Zing Capital, Beechwood Ventures, and Chinese VC fund Jade Value. The San Francisco-based startup also recently announced an ICO, which Lubinsky said is intended to help support international expansion.
While the platform has primarily served as a place for landlords to effectively vet tenants bidding for the rental application, Lubinsky said functionality is also being developed to include—to the benefit of renters—landlord reviews, too.
Lubinsky hopes to launch the new functionalities in 2018, as well as expand the platform to Australia, Canada, and the UK.
Cadence is a fintech reporter and writer at Fintech Unltd, where she covers the changing landscape of financial technologies. Previously, Cadence interned at Psychology Today, Business Insider and the Wisconsin State Journal. Cadence is interested in how science and technology intersect with power and culture and is curious about the world we are creating for tomorrow, consciously or not. She graduated from the University of Wisconsin–Madison in 2017 with degrees in Journalism and Chinese. Send tips and story ideas to Cadence at [email protected] You can also follow her on Twitter @cadencebambenek.