Till, a platform that serves as an intermediary between landlords and renters, has raised an $8 million seed round led by Route 66 Ventures, with participation from MetaProp and NextGen Venture Partners.
Till was founded on the premise that people are not always able to pay their rent on the 1st of the month, but might be better suited to paying their rent in smaller payments throughout the month. Through its flexible rent platform, Till creates a customized payment schedule for renters that aligns with their monthly cash flow. Till estimates it can help cut evictions by as much as 50%.
“We work to understand that timing and we can look at their expense loads to help them balance if they should be paying more now or more later in the month,” Till CEO David Sullivan told TechCrunch.
With the funding, Till plans to work on getting more landlords on board across additional states and further develop the flexible rent product. In order for renters to use the platform, their landlords must already be working with Till. To date, Till is live at 170 properties that consist of 30,000 units in total across 14 states.
“Since we first learned about Till, we have been extremely impressed by its ability to bridge the gap between the increasingly volatile income and expense patterns of renters and the more rigid financial realities of landlords,” MetaProp General Partner Zak Schwarzman said in a statement. “As the uncertainty wrought by the COVID-19 pandemic and related economic fallout continues with no clear end in sight, it’s more important than ever that landlords find new, mutually beneficial, ways to work with renters to reduce late fees, minimize evictions and foster renters’ long-term financial health.”
Late fees vary by state and by landlord. Sometimes they come in the form of a flat fee or a percentage of your rent. Either way, they’re punitive.
“It’s a very punitive fee against a renter having a cash flow issue,” Sullivan said. “Even if a renter has the ability to stay in the unit, renters then get overburdened with fees, which makes their ability to pay even more challenging.”
While this product may have more relevance these days, during a time when people are facing severe economic insecurity as a result of COVID-19, Sullivan said this problem is not specific to the pandemic. Though, COVID-19 has exacerbated the issue.
“Pre-Covid, you have about $50 billion of delinquent rent a year and renters being charged about $5 billion in late fees,” Sullivan said. “That creates a burden on renters. It leads to three million families being evicted in a normal year. And evictions disproportionately impact minority communities.”
The business model, however, relies on financial insecurity, as Till’s target customer is someone who already struggles to make their monthly rental payments. For its flexible rent product, Till charges renters $3 per month if they make all of their payments on time, and $9 per month if they don’t. Till also offers a rental loan product for renters with varying rates.
“We want to create win-win outcomes,” Sullivan said. “We fundamentally believe that when you get renters to succeed, landlords succeed to.”