Why Stake acquired Circa; two learnings from a powerful partnership
Today, Stake announced the acquisition of Circa to create the first Cash Back rent payments platform. Full announcement here with coverage by Thesis Driven here.
I’m thrilled to welcome Circa to Team Stake. Here is why:
- It is unusual to find mission aligned PropTech companies, but we found that with Circa, which makes this announcement so special.
- Stake partnered with Circa on collections management before the acquisition. In that partnership I saw Stake’s top cultural principal reflected in the Circa team: bring your authentic self. If you meet us — and I mean now ALL OF US — you’ll see what I mean!
But today, I want to focus on two learnings we found in our partnership with Circa. These learnings are part of a larger transformation: to bring loyalty to the renter economy.
Learning 1: Where residents pay is where property performance happens….or not.
If your property uses a payment provider today — and maybe they even offer rewards like points — are they creating better performance for your property? Can you prove it? Track it? Optimize it? These were the first questions we had as we explored payments with Circa.
We knew that Stake had a big impact on property performance. You can see that in The Data. So we knew that at the moment of payment, Stake can change behavior. Or, put another way, build loyalty to the property.
And post-Covid — where renter paying behavior has changed so dramatically that Freddie Mac, a Stake partner, sited it directly recently — properties need that to change. This has been the central solution for Stake since day one: Renters pay rent on-time, they get Cash Back, renters like getting cash, and properties reduce delinquencies.
With Circa, we saw the faster Stake could give Cash Back to residents, the better performance properties achieved.
But, as I mention in our public announcement, traditional payment providers do not drive performance. Yes, if a renter pays rent with those providers the money arrives. But properties should be asking if the payment provider improves performance at every step in the renter journey. Stake handles leasing, renewals, and delinquency, and now, with Circa, we can do it faster, at the moment of payment, and with every payment type: credit card, debit card, ACH, and even 40,000 cash deposited locations nationwide.
Stake will still work with all the traditional payment providers to reward renters with Cash Back as we always have. Stake never mandates or forces one payment solution over another, we want to bring our property performance solutions to all communities in the industry. But, with Circa, we can bring an end-to-end payment portal to properties who want to upgrade and achieve even better results.
Uniting loyalty + payments results in better property performance. If you use rewards today — either provided from your payment provider or otherwise — and if you can’t show how it improves your performance, then the loyalty of those rewards isn’t being directed to the property, it is being directed somewhere else. Now, Stake + Circa can unite loyalty and payments to help properties outperform with every payment.
Learning 2: Collections should be centralized and on-ledger.
Early in Stake’s growth — around 2021 — we had experimented with collections, we called it Get Current. Stake automated messages to residents with an incentive to pay back due arrears. There were three learnings then:
- You can’t collect unless you can send a payment link, you’re still chasing the resident and wasting on-site team’s time.
- Collections are hard, with many edge cases, and automation alone doesn’t deliver compelling results.
- Stake did not write to the ledger, adding more work for property teams.
Circa had already proven success in collections management, and we partnered to prove it out. Here is how it changed the picture for Get Current:
- Circa sends a flexible payment link to residents.
- Circa uses a human-led CRM to connect with residents via text, email, and drop-voicemail through a trained team of resident payment coaches who support residents directly.
- Circa writes to the ledger and has a payments operations team to ensure payments are recorded correctly.
The results of the partnership were compelling: we saw repayments rates as high as 50%, and on average 30%. Now you can see we have made Get Current a full product available to all Stake Network Properties. Adding Collections Management to our leasing, renewals, and delinquency solutions for properties.
What’s next?
It is exciting to be the first in the industry to unite Cash Back and payments. Especially at a time properties need more help solving the big challenges. There is plenty on the roadmap as Circa joins our team, and the energy here is palatable. I invite you to get in touch, learn more, the transformation of the renter experience has only just begun.
