Findigs, a rental screening startup, raised $27 million in Series B funding led by Nyca Partners, the company tells Lucinda exclusively.
Why it matters: Property managers and owners are reporting a surge in rental fraud at a time when high rental costs remain a major concern for U.S. federal economists.
Zoom in: The company has raised $47 million since its founding in 2020.
- Other investors in the round include RPM Ventures, Streamlined Ventures, Expa Ventures, Activant Capital, Colle Capital and Frontier Venture Capital.
How it works: The rental market focuses heavily on credit scores as a proxy for tenants' ability to pay. Findigs uses a more holistic set of data, while streamlining the process onto one platform, CEO Steve Carroll says.
- The tool may use a mix of credit checks, criminal eviction checks, criminal checks, income verification via API, and pet verification. (Findigs might use AI to interpret veterinary documents on the breed, as some buildings restrict what kinds of pets are allowed.)
- Property managers and owners set parameters for what kind of tenants they want. Findigs bases its checks on those criteria to get a result — and even a recommendation based on the customer's rules — to the property owner or manager within the day.
- Findigs makes $40 to $80 per tenant. The company says it has processed close to a million applications.
- Carroll says Findigs differentiates itself by reviewing all cases directly and eliminating the need for property managers to conduct their own reviews.
Context: About 70% of apartment owners and managers surveyed by the National Multifamily Housing Council say they experienced an increase in fraudulent applications and payments, according to the report published in January.
- About 85% said applicants falsified or fabricated paystubs or other forms of income documentation.
What's next: As it adds proprietary data, Findigs envisions developing a better underwriting system, one that may use more historical rent payment data.
- It also has big ambitions to be a more consumer-facing platform, where users can search for new homes or movers, says Carroll.
- That doesn't necessarily mean becoming a search platform, but it could mean partnering with existing rental marketplaces.
- Findigs could also cross-sell products like rental insurance or security deposit alternatives.
State of play: Other tenant screening platforms include TransUnion's SmartMove screening site and RentPrep, which Roofstock acquired in 2022.
The bottom line: Startups focusing on the 35%-plus of U.S. households that rent have seen significant support.
- Bilt notably raised $200 million at the start of the year, rent rewards company Atlas raised $1.6 million in June, and Leasecake raised a $10 million extension in April.
- "Rent is in a different realm of needs — needing a roof over your head is very fundamental," says Nyca's Jeremy Solomon.
