Historically, the relationship between landlords and tenants can be contentious.
At the same time, the experiences of managing a home and renting it are not always smooth.
Belong, a startup aiming to address both issues while giving tenants a way to save for homeownership, just raised $50 million in equity and secured $30 million in debt to expand its offerings and markets. The round was foiled by Fifth Wall, noted Owen Savir, co-founder and president of Belong. Fifth Wall led equity financing with recurring lenders Battery Ventures, Andreessen Horowitz (a16z), and GGV Capital.
Established in 2019 by Argentina-born Ale Resnik, Savir, and Tyler Infelise, Belong is a three-way marketplace providing services to homeowners, landlords, and renters alike.
From the homeowner’s perspective, Belong offers home management services that make owning a rental home easier. For example, if a rental property needs to be repaired, the startup has an internal maintenance team that can handle it on behalf of the landlord. It also provides homeowners with financial tools to manage their investments and guaranteed rent on the first of each month. And it will also help an owner refurbish a property and get it ready to rent.
On the tenant side, Belong has created a system allowing them to build their own home. For example, with each one-time rent payment, residents get back about 3% of the rent, which accumulates in an account to be used for a down payment on the purchase of a home – but only if it is used to purchase a home Through its platform. You see, the company also serves as a brokerage.
The mission is similar to Divvy’s proptech unicorn but with a different model. Divvy, which raised $200 million in financing at a $2 billion valuation last August, buys homes on behalf of tenants and helps them become homeowners.
For its part, Belong differs from other offerings in the space in that it relates to the real estate management piece, according to Resnik, a former entrepreneur-in-residence at a16z, who previously founded three other startups.
Resnik said the concept for Belong was inspired by the “pain” he and one of his co-founders had when renting houses.
“We are painfully aware of all the pain people go through when they have to rent a house,” he told blog line, “and how hard it is to be able to afford a house.”
While studying the issue, they discovered a “disturbing” trend of more institutional investors taking ownership of the housing market.
“We looked into why there weren’t more individual homeowners, which would be a net positive for the economy,” Resnik said. “And we realized it wasn’t easy to buy a house and manage it in a stress-free way.”
Image Credits: Belong
Simply put, Belong wants to take residents out of “second-class citizen status” and connect them with homeowners “who want to give them a great experience” while handing those homeowners over to the startup.
While Resnik declined to reveal valuations or hard sales figures, he did say that San Mateo, California-based Belong increased its sales nearly 3x in 2021. With the latest financing, it has raised $95 million in equity and secured $30 million in debt.
The startup has several revenue streams, according to Resnik. First, homeowners pay 8% of the rent Belong collects for the service to “manage their home from start to finish.” It has a built-in payment infrastructure, so tenants pay through the platform, and the money comes out there automatically. Every time the startup looks for a resident for a house, they get 6% of the rent. It also allows homeowners to finance maintenance or repairs on a home.
Today, Belong operates in the Bay Area, Southern California, Miami, and Seattle with a technical team spread across LatAm, a source of pride for Resnik. With the new capital, the company plans to expand into new markets, hire more staff and focus on product development. Thousands of homeowners and nearly 7,000 renters are currently on the platform.
Lead investor Fifth Wall has invested in companies that help streamline consumers’ home buying and selling process. But partner Dan Wenhold believes Belong “fills an important gap in the market through its technology offerings that serve consumers after they become a homeowner or renter.”
“We believe that Belong’s people-centric model raises the bar for the future state of residential rental and ownership,” he said, noting that Belong’s focus on the retail segment of single-family owners and tenants “is an important differentiator.”
“These groups are traditionally not served by offline real estate managers who don’t use technology or a tech-first approach to solving problems,” Wenhold told blog line. “With in-house operations and service professionals in every market they operate in, Belong offers a full-stack approach to property management.”
Overall, we see an increasing number of businesses targeting tenants. Earlier this week, the blog line reported on Arrived’s $25 million Series A. That startup raised capital from Forerunner Ventures and Bezos Expeditions (Jeff Bezos’ private investment fund) to give people the ability to buy stock in single-family homes with “just $100.”
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