"I always find the best way to start to develop an idea is to just start pitching it as if it's already a thing," says 32-year-old Ankur Jain, the founder and CEO of Kairos, a New York City-based business that invests in and operates a portfolio of companies aimed at reducing people's biggest expenses. That mission continues with Jain's latest Kairos subsidiary, Bilt, which launched in June 2021 and rolls out to the broader public on Monday. Bilt enables consumers to charge their monthly rental payment to a credit card, allowing them to build credit quickly, as well as earn points that can be used to pay for flights, hotels, and goods--or even a mortgage

"The idea that you rent for all these years but then get no closer to homeownership made no sense," Jain says. But as any entrepreneur knows, finding a consumer pain point is often the easiest part. Building an innovative business to solve it can take years. That's what happened with Bilt, which Jain started working on in 2018. The startup has 43 employees, and has raised more than $63 million to date. 

As it turns out, there were a few reasons that nobody had ever created a co-branded credit card for renters. One of the biggest was that credit card companies need an ongoing underwriter--usually a bank. Overcoming that and other complicated challenges ultimately hinged on Jain's ability to collaborate with many stakeholders, including payment processors, banks, airlines, landlords, and the Federal Housing Administration. Here's how he did it.  

Follow the money and listen to feedback 

In 2018, Jain began workshopping the idea for Bilt with people in his network. After a conversation that year with Barry Sternlicht, the founder, chairman, and CEO of real estate investment firm Starwood Capital Group, the Bilt founder realized that building a loyalty program could yield big profits: "All the travel spent in this country combined is about $100 billion a year," he says, while "people spend $500 billion-plus a year on rent, and there's no loyalty program and no card, for that entire sector."

To build a loyalty program though, you need to purchase the points in discounted bulk from reward partners like airlines and hotels before cardholders can earn those points on transactions. Jain thought perhaps that landlords would help to fund a loyalty program. Why not offer them a way to keep renters in their building and reduce the overhead cost associated with renter turnover and empty units?

He found that the landlords he pitched didn't want to take on that extra cost, but they were interested in being associated with it. The feedback made the Bilt team realize they'd have to build their own loyalty platform and currency. That was huge, Jain says, because "now all of a sudden, you've got this really unique thing that can have a lower cost to the owner than its value to the residents." 

By making a change to their pitch, Bilt was able to start securing landlord partners. Starwood Capital Group was the first to join the Bilt Alliance in late 2019. With a major landlord on board, Bilt's concept became more attractive to rewards partners. Later that year, Virgin Points became the first one to sign on.  

Don't forget your mission

While all of this was going on, Bilt still had to find a way to facilitate its original mission: creating a path to homeownership for renters by allowing renters to use their points toward a down payment on a house. While landlords loved the idea of being able to offer this to their renters, Jain says, Bilt's lawyers raised a red flag: "They said, 'Well, we're not sure if this is actually allowed because government mortgages and the FHA have very strict rules about what kind of funds you can use towards a home or home down payment.'" 

When those rules were written in 2008, rewards points weren't listed as an option. Bilt petitioned the FHA to change that, but its first couple requests for approval were denied. So the team spent 18 months talking to regulators--including Fannie Mae, the secretary of Housing, and the secretary of the Treasury--and walked them through the goals of the program. They argued that points had become a new form of savings, so why shouldn't they be used toward homeownership? In October 2019, the FHA finally granted approval.

Get help from partners to build what you need

With a solid coalition of regulators, landlords, and rewards partners on board, it was time to actually build a platform. In February 2020, Jain began talking to Sherri Haymond, executive vice president, digital partnerships at Mastercard. Over the next two years, they worked together to develop, among others, the systems necessary to facilitate payments to landlords. According to Haymond, a Mastercard acquisition called Transactis helped with this piece of the puzzle, while another Mastercard subsidiary, SessionM, helped build out the Bilt app's rewards platform.

But don't expect partners to do all the work

The final piece of the puzzle was to secure Wells Fargo as an underwriter and distribution partner. When Bilt approached the bank, it brought its own network and distribution channel (tenants) with a robust rewards program and user experience. That's unusual, says Dan Dougherty, Wells Fargo's executive vice president of co-brand partnerships, noting that typically, entrepreneurs want Wells Fargo to help distribute their product to its customers without showing that their idea can stand up on its own. 

An early no can turn into a yes

Once it had solidified partnerships with Wells Fargo and Mastercard, Bilt went back to the other major landlord companies that had turned it down originally. The Bilt Alliance, which in total includes more than two million rental units, now includes, among others, AvalonBay Communities, Cushman & Wakefield, the Moinian Group, Starwood Capital Group, and Related Companies. Renters outside of the Bilt Alliance also can pay via credit card if their landlord's payment portal allows it. For those that don't, Bilt will send a check, or facilitate an ACH transfer. And in the end, landlords ended up putting up some cash too: Members of the Bilt Alliance fund points earned from new leases, lease renewals, and other similar incentive programs.