Two months ago, RentMoola’s VP of Global Strategy, Andrew McLeod, stood in front of a room of people at the BCTIA in Vancouver, and said, “I have a really urgent need right now. I need a cheque. Does anyone in the room have a cheque on hand?”
To the surprise of no one, no hands went up.
RentMoola was presenting their global payments company that allows tenants and owners to get rewarded for paying rent and condo fees online via credit card and direct debit. The company seeks to relegate the low tech physical cheque to its place in some rental-market museum.
The company’s service allows property managers and landlords to manage payments across an entire portfolio of units. Put simply, RentMoola eliminates rent cheques by giving renters a convenient way to pay their rent online or through their mobile phones, while providing perks for paying rent that include opportunities for savings and discounts from a host of companies like Zipcar, Uber, and the Vancouver Whitecaps.
RentMoola’s largest property management client has 40,000 units. Collecting 40,000 cheques every month, processing them, waiting for them to clear, and then beginning collections is an administrative pain point. The cheque is rarely seen these days in transactions except for rent payments. RentMoola intends to provide another option, if not eliminate cheques from rent payments entirely.
The company currently provides services to a host of property managers with over 100,000 units in aggregate. Regarding adoption rates, co-founder and COO Philipp Postrehovsky said, “The adoption rate depends on the demographic. Student housing has high adoption. Our adoption will vary from 40% up to 100%.”
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When I asked why student adoption was so high, he replied, “Students don’t even know what cheques are. A lot of them have never even seen one.”
With the impetus derived from this observation and others like it, the company seems to be on a mission. Postrehovsky said, “People do not write cheques anymore, and if people still do, it’s only to pay their rent. We want to eliminate that, so we are really a simple solution that can truly eliminate the cheque once and for all.”
RentMoola’s revenue model is mainly based on transaction fees. Landlords and property management companies provide the option to their tenants to pay using RentMoola’s services. Tenants who choose to pay with their rewards credit card, or Mastercard or Visa Debit, pay a service fee that includes the cost of acceptance. For the landlords and property management companies who often have tight margins, the service is free.
RentMoola also provides the choice of paying with e-cheque/ACH, which is free for both tenants and landlords.
To incentivize the transition to cheque-less rent payments, the company has established the MoolaPerks program, allowing users access to exclusive deals with a number of stores and services, including the chance to win one month free rent for up to $1500. Another benefit they emphasize is that renters paying with rewards credit cards have an opportunity to earn points towards travel, cash, and merchandise, effectively paying themselves while they pay rent.
Thus far, RentMoola has not taken venture capital, but has instead employed a somewhat new and unusual type of fundraising for technology companies. The company has raised an undisclosed amount in the millions via exempt market dealers and accredited investors.
Postrehovsky said, “It’s a relatively new model. It’s really leveraging the exempt market dealers out there that used to raise money for junior mining, and junior mining is dead, so investors are looking for new investment opportunities, and tech is hot, particularly fintech. We have a good story, we think, so the RentMoola investment opportunity is on the shelf of multiple exempt market dealers. They pitch us, and people invest.”
Despite the successful yet unorthodox fundraising method, the team at RentMoola says it is open to VC investment, but is seeking more than just money. If the right strategic partner came along, they say, they would certainly entertain the notion.
For the near term, the team is focused on launching a new product in Q4 called RM Everywhere, which allows renters whose property managers are not on the platform to benefit from RentMoola’s services. If a renter’s property manager is not signed up, or prefers cheques, that renter will be able to sign up with RM Everywhere to use e-cheque or credit card, and RentMoola will send a physical cheque to the landlord.
Over the long term, RentMoola intends to be a world-wide solution. Postrehovsky said, “It’s inspired by a global pain point, so we want to move into other markets. It’s a global opportunity. We’re focused right now on the North American market. We have a pretty good foothold here in Canada. In the US, there are some competitors, but there is still a ton of opportunity.”
Expediting the movement toward these goals, RentMoola was accepted into the BCTIAs second-stage accelerator, Hypergrowth, where the team has access to some of the most successful tech entrepreneurs and mentors in Vancouver.