Ontario Teachers' Backs Bilt Rewards

Gillian Tan of Bloomberg reports Ontario Teachers' pension backs Bilt, now valued at US$3.25 billion:

Bilt Rewards, the customer-loyalty program provider that converts rental payments into points for airline miles, hotel stays, restaurant meals and other perks, has raised US$150 million in additional equity funding led by Ontario Teachers’ Pension Plan. 

Vanderbilt University Endowment, the University of Illinois Foundation and existing investors also participated in the extension to a January funding round, lifting Bilt’s valuation to US$3.25 billion from US$3.1 billion.

OTPP, the Canadian pension fund, owns Willow Bridge Property Co., and expressed interest in backing Bilt after witnessing the growth of both its resident and neighbourhood loyalty programs, Bilt chief executive Ankur Jain said Thursday in an interview.

“We’re building a differentiated platform that benefits residents, landlords, and local businesses,” he said. Through the extension, he added, Bilt can raise another US$50 million from strategic investors, subject to board approval.

Jain said the New York-based startup, which was profitable based on its earnings before interest, taxes, depreciation and amortization in 2023, is set to remain profitable in 2024, though he declined to provide specifics. Bilt has more than US$400 million in cash and no debt on its balance sheet, he added.

The startup plans to add verticals such as health care, groceries and gas to its neighbourhood merchant network, which has grown to over 21,000 restaurants from about 2,500 seven months ago, and 3,500 fitness studios from about 100 in January, Jain said.

Jain said members in all 50 U.S. states are spending US$30 billion on its platform annually, a 50 per cent jump from the US$20 billion figure Bloomberg News reported at the start of the year.

“We’ve seen the positive reaction from both customers and all those involved as part of their ecosystem,” said Teachers’ Venture Growth’s Rick Prostko. “We are excited about the opportunity to work with Ankur and the full management team and find ways to support them as a value-add partner.”

Bilt, launched in 2021, has grown rapidly as people in their 20s and 30s flocked to the platform. Members earn points for spending, which they can redeem for rent credits or rewards with merchant partners or transfer to outside loyalty programs, like those operated by major airlines and hotel chains.

Wells Fargo & Co., Mastercard Inc. and Blackstone Inc. were among Bilt’s earliest investors. The company’s backers include venture capital firm General Catalyst, Todd Boehly’s Eldridge, Left Lane Capital, Camber Creek and Prosus Ventures.

General Catalyst Chairman and Managing Director Ken Chenault, who was previously the chief executive officer of American Express Co., joined Bilt as chairman this year.

“In January, we recognized Bilt’s unique capture of loyalty in the previously untapped rental payments space,” Chenault said in an emailed statement. “Bilt is rapidly becoming the leading platform for driving neighborhood commerce.”

OTPP issued a press release stating Bilt Rewards secures $150 million in additional funding led by Teachers’ Venture Growth:

Vanderbilt Endowment and University of Illinois endowment also participate in the round alongside existing investors

NEW YORK - Bilt Rewards, the nation's largest loyalty program for home and neighborhood, today announced it has raised an additional $150 million in funding. The investment round was led by Teachers’ Venture Growth (TVG), the late-stage venture and growth investment arm of Ontario Teachers’ Pension Plan, with participation from existing investors and new endowments including Vanderbilt University and the University of Illinois. This latest round comes just months after Bilt's $200 million raise in January, which valued the company at $3.1 billion.

Continued Rapid Growth

Since the January announcement, Bilt has experienced remarkable growth across multiple facets of its business. The company's platform spend has surged to over $30 billion annually, representing a significant increase from January. This growth has been driven by the expansion of Bilt's resident loyalty program, which has extended its reach to more apartment buildings and ventured into the condominium & HOA market. Simultaneously, the neighborhood loyalty program has seen significant expansion, now encompassing over 21,000 restaurants and 3,500 fitness studios.

Building on Strong Foundations

The January funding round, led by General Catalyst and Eldridge, brought significant additions to Bilt's leadership structure. Ken Chenault, former American Express CEO, was appointed as company chairman, while NFL Commissioner Roger Goodell joined as an independent director. These additions have further strengthened Bilt's strategic position in the market.

Ken Chenault, Chairman of Bilt, commented on the company's trajectory: "In January, we recognized Bilt's unique capture of loyalty in the previously untapped rental payments space. Today, Bilt is rapidly becoming the leading platform for driving neighborhood commerce. By connecting residents, property owners, and local businesses, we're creating a powerful ecosystem that benefits all parties involved."

Expanding the Ecosystem

Bilt's resident loyalty program continues to evolve, helping properties collect on-time rent payments, offer tailored benefits to residents, and generate new revenue from local spend at partner merchants. Rent represents the single largest expense for most Americans, and the Bilt platform allows consumers to earn rewards from this expense. Complementing this, the neighborhood loyalty program enables merchants to drive more business from local customers and acquire new customers as people move into the area. The platform facilitates rewards when residents spend at partner merchants and gives merchants the ability to run targeted benefits and campaigns, creating a win-win situation for all participants.

Rick Prostko, Senior Managing Director at Teachers’ Venture Growth, stated: “BILT Rewards has created a unique loyalty program to empower renters. We’ve seen the positive reaction from both customers and all those involved as part of their ecosystem. We are excited about the opportunity to work with Ankur and the full management team and find ways to support them as a value-add partner.”

Sebastien Silvestri, CEO of Daniel Boulud’s DineX restaurant group, shared his enthusiasm: "I'm thrilled about Bilt's neighborhood loyalty program. Local customers are the lifeblood of our industry, and Bilt offers an incredibly unique way to connect us with residents in our area. This program not only introduces our restaurants to new local patrons but also helps us build lasting loyalty. The ability to offer targeted benefits and seamless payment options through Bilt's platform is revolutionizing how we engage with our community. It's not just a rewards program; it's a powerful tool for fostering strong, lasting relationships between restaurants and the neighborhoods we serve."

Looking Ahead

Bilt Rewards continues to scale its resident loyalty program, now partnering with seven of the ten largest multifamily owners in the country. The company is expanding to single-family homes and condominiums, with plans to include mortgage payments later this year and will be using the new capital to further expand its neighborhood loyalty program with merchants across the country.

Ankur Jain, CEO of Bilt Rewards, commented: "This funding accelerates our vision of rewarding Americans for how they live and spend in their communities. We're rapidly growing our neighborhood loyalty program, expanding into essential categories like healthcare, gas, and groceries. With members in all 50 states, we're building a comprehensive platform that benefits residents, property owners, and local businesses across the country."

For more information about Bilt Rewards, visit www.biltrewards.com.

I'm going to keep my comments short and sweet here because everyone is focused on the big selloff in the stock market today.

I think what Teachers Venture Growth's investment in Bilt shows us is there are always new and exciting companies worth investing in at any stage of the economic cycle.

Bilt Rewards is scaling up like crazy and is already profitable, so it doesn't surprise me Teachers' led this round to invest another US$150 million valuing the company at US$3.25 billion. 

Remember, TVG represents roughly 3% of OTPP's total assets but the team partners with external venture capital funds and does its own screening to find fast growing companies of the future.

Most of Canada's Maple Eight funds have an internal venture capital group looking to invest in late stage fast-growing companies.

Why do they do this? Because they need returns and they need to make many bets in a portfolio of these companies to see if one or two of them can pay off in a huge way.

It's a little bit like investing in biotech stocks, 90-95% of them flop or go nowhere, the ones that make it big deliver stellar returns.

Now, Bilt Rewards which is a loyalty program for renters had very big backers early on: Wells Fargo, Mastercard and Blackstone, so it's not surprising to see it take off in a huge way.

It's CEO Ankur Jain said the startup plans to add verticals such as health care, groceries and gas to its neighbourhood merchant network, which has grown to over 21,000 restaurants from about 2,500 seven months ago, and 3,500 fitness studios from about 100 in January.

In essence, Bilt wants to dominate your neighbourhood loyalty rewards business and it is already on its way there, so keep a close eye on this fast-growing company.

Below, an introduction to Bilt Rewards, a program that lets you earn points on rent.

More recently, Ankur Jain, Founder & CEO, Bilt Rewards is interviewed by Steve McLaughlin, Founder, CEO, & Managing Partner, FT Partners at the Fintech Meetup 2024 (second clip).

Thrid, Nicholas Colas, DataTrek Research co-founder, joins 'Power Lunch' to discuss the market selloff and volatility.

Lastly, iFi AI's Ron Insana, Solus' Dan Greenhaus and Hightower’s Stephanie Link, join 'Closing Bell' to discuss the market selloff, the Fed's next move and their market outlook. 

Note: I might take the rest of the week off from blogging and come back next week to cover mid-year results.

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