Bilt Rewards confirmed their new valuation of over $10 billion – specifically $10.75 billion – based on a $250 million fundraising round meant to fuel expansion beyond apartment rent and into homeownership.
And they also shared big news: that they will be leaving Wells Fargo for Cardless. They had promised a ‘2.0 version’ of their co-brand credit card, and it was clear the value proposition would be tweaked considering the way that the economics weren’t working for their issuer, Wells Fargo (one of their early investors – who has made out very well on that side).
We now learn that there will be (3) cards, and that current Wells cardmembers will move to the Cardless product, in February. The cards will be at 3 different price points:
- No annual fee, as today
- $95
- $495
Bilt’s Chairman is former American Express Chairman Ken Chennault. American Express is an investor in Cardless. It’ll be interesting to see whether the move includes running payments on the American Express network.
My Bilt card only just transitioned from Evolve Bank to Wells Fargo, since I applied very early on before the Wells co-brand launched. It’ll be interesting to see what the new value proposition looks like. I wonder whether I should keep my current card and allow it to transition, or cancel first so that I apply fresh (with any new incentives) for the card that I want. Bilt traditionally hasn’t been big on initial card bonuses.
However it’s unclear how easy the upgrade path might be to a $95 or $495 card if those are attractive. On the other hand, Cardless no longer has a one card per lifetime rule. I expect they’ll build in the ability for cardmembers to choose the product that’s right for them in some fashion. As I understand it, Cardless rules are broadly:
- 60 days between card approvals
- Must wait 45 days after being declined for a card
- Can only have one card per brand (you wouldn’t be allowed both a no annual fee and $95 fee card with Bilt)
- You can only have one of a specific card (you can’t have two of the same Bilt cards)
Cardless already issues several interesting rewards cards, like TAP Air Portugal, Avianca LifeMiles, and Qatar Airways Privilege Club. The especially like the benefits of the Qatar card which comes with status that gets you lounge access – and even business class Flagship lounge access – when traveling on American Airlines domestic flights and the Avianca card which has some great award discounts.
And here’s a bit of trivia for you, by the way. The President of Cardless was once an intern at The Points Guy.
Got the email today, too. 3 card products, $0AF, $95AF, $495AF, switching from Wells to Cardless, all by February 2026, but no further details. Earn ‘em and burn ‘em, folks!
I’d pay $495 for the current card. I get way more than that in value just from paying rent.
@E. Jack Youlater — Woah! That’s a bit… ‘premature.’ Like, let’s at least see what they give us for that AF first. A little ‘foreplay’ would be nice, is all I’m sayin’. Don’t neglect the… credits or whatever they include to entice us to upgrade to the premium card, ya know.
They don’t need to give me anything for that AF. My rent is $5k which means I earn 60k points a year which is at least $600. $600 is more than $495.
Cardless has long had the weakest tech. foundation. They instituted a one-card-per-lifetime rule for the frst few years of their operation. The clients (TAP, Avianca, Qatar, etc.) did not know that millions of their credit-worthy customers were being turned down for their branded credit card until I told them.
They have been forced to upgrade their backend to abolish that, but they are still deficient. For example, when they demand ID for approval if the address on a DL and the delivery address on a utility bill differ, they turn the application down without asking for clarification! Even though the utility bill clearly shows the service address is the same as the DL address.
Quite why BILT would switch tov them is a mystery, and something they wil likely regret. The price must be bargain basement.
@E. Jack Youlater — I’m in a similar boat on rent (NYC), but the opportunity cost of the no-fee card, earning $600-worth points, vs. paying $495, basic math, $105 take-home value. While still ‘ahead,’ it’d be nice to actually ‘get something’ for that large fee, which I’m confident Ankur will announce. Any speculation on what the new ‘benefits’ might be? Also, were you using @Erect as a name before?
“Wells Fargo (one of their early investors – who has made out very well on that side).”
Totally wrong. They lost a lot of money.
Yikes couldn’t score a proper bank card issuer.
You can see where this is headed, deflecting and downplaying the card side of it in this article:
https://www.fastcompany.com/91366249/points-on-rent-startup-bilt-announces-new-rewards-credit-cards-with-cardless-and-a-250-million-funding-round
After reading the email, I’m gonna stay away from these charlatans. “a comprehensive platform that transforms how people experience their home and neighborhood”. Really? Clowns.
From what little I’ve seen it really doesn’t look like there’s any compelling reason for me to move into the upper tier cards. If they offered top tier Bilt status with the $500 card I’d look into it as the free helicopter ride every year would be really cool and better transfer bonuses would make financial sense.
“Wells Fargo (one of their early investors – who has made out very well on that side).”
Totally wrong. They lost a lot of money.
Confirmation:
https://www.wsj.com/finance/banking/wells-fargo-plans-to-exit-a-credit-card-program-that-gave-rewards-for-rent-336dae4b?mod=hp_lead_pos11
From this article it is also clearer whay Bilt went to Cardless – nobody else would offer terms close to them. Cardless is the weakest issuer in the credit card space, so BILT is ion for a terms reset. Expect the “100% fee free rent” to only be on the most expensive card.
@L3 – Wells was losing $10m/month, but the value of their stake is hundreds of millions of dollars.
On net, Wells exits the deal ahead.
@Christian — I doubt they’ll include that (the top tier status), but the helicopter ride does sound cool. I recall @Gary Leff took Blade and posted some epic photos from his ride earlier this year during his visit to NYC.
@Mantis — Excellent usage of the word ‘charlatans.’ Depending on how things go, perhaps we could also use ‘rapscallions’ or ‘scalawag’ to describe things. I, too, like old-timey words. Get out your thesauruses!
@ Gary — How much of Bilt do you own exactly? Your obsession with its overinflated valie seems to indicate you have shares.
@Gary: Send a link that values their stake. Evidence-based. The WSJ has not published it in either of their long pieces about the relationship. Surely because they don’t have it.
Your claim is also at odds with the WSJ article yesterday. “The partnership with Bilt had been scheduled to end in 2029, but Wells decided to exit early after it became a money-losing venture, according to people familiar with the matter. “
@L3 – your argument doesn’t contadict mine. I said they made money on the deal overall, but are losing money on it incrementally each month.
We know when Wells invested and how much (that’s public) so have a pretty good idea the value of their stake though not any dilution that could have occurred, which is why I didn’t say it’s worth “$800m” or something like that.. just “hundreds of millions”
There was nothing insightful about that WSJ piece yesterday, mostly a rehash of last summer’s report + Bilt’s release (and some things incorrect).
@Gene – While Brian Kelly is an investor in Bilt, I did not invest any money in Bilt (and was not asked to invest). I am just interested in their business because I found it fascinating from the get-go, trying to create a loyalty program without a pre-existing product or customer base. They found a way to reach valuable customers that no one else had done before. It’s still not a guaranteed success, but they’re doing far better than American Express did in trying to build a coalition loyalty program in the United States (Plenti).
@Gary: ” I said they made money on the deal overall”. Proof?
Nobody else has said that. What evidence do you have that they don’t?
Think it’s still TBD how Wells ends up in this deal. Feels like the equity value is probably greater than the cumulative income statement losses, but the bigger issue is that the equity gain is paper and the income statement losses are real. Wells may end up cashing in at a $10.75B+ valuation or they may end up with a lot less than that. Who knows. Meanwhile, they are burning lots of real cash. Also, they have the WSJ publishing front page articles about the dumb deal they did. More reputational costs for a bank that used to be “solid as Sears” but nowadays is regarded as a poorly-run sh*tshow.
On the equity value, definitely seems that their mark should be in the “hundreds of millions.” From what I can gather from public info, they invested ~$20M across two rounds, one $60M round at $350M valuation and one $150M round at $1.5B valuation. Their current mark could vary a lot depending how their investment was spread between the two. Using ChatGPT to help me w/ dilution math, I’m getting $125M at low end (all $20M invested in $150M/$1.5B round) and $432M at high end (all $20M invested in $60M/$350M round). Note, I did not check ChatGPT’s math or it’s data on the fundraising history.
Personally, I’m skeptical of the current equity valuation. Feels really high. Bilt doesn’t make that much money and the free points on rent thing clearly never made sense. It has been impressive watching Jain use Wells’ money to make this thing so big, though. I’m getting slight WeWork/Softbank vibes from General Catalyst, probably already Bilt’s largest existing investor, leading this follow-on round at such a high valuation.
@BiltDifferent “Meanwhile, they are burning lots of real cash.”
No, not really. $10 million a month? They generated $125 billion in revenue last year. $10 million doesn’t come close to generating an SEC 8-K.
Meanwhile they knew quite well they would be losing money upfront. That was part of a strategy. Wells was trying to get into the cobrand credit card business, and had to overpay to get their foot in. They didn’t do the Choice Privileges and Expedia deals (both of which they overpaid for) just to get Choice and Expedia. The goal was to have experience at cobrands so they could bid for big deals. A bank the size of Wells could compete, potentially, for a big airline.
But that investment no longer made sense when the bank did a strategic pivot and decided to focus on building out its own-branded products instead. So we got the introduction of Autograph Journey, for instance, and we haven’t seen Wells launch any more cobrands. (The Expedia deal was in the pipeline for years.)
Once Wells wasn’t driving towards building a big cobrands business, the early investments that were about building that business no longer made sense in the same way.
@L3 “Nobody else has said [that Wells made money on the deal overall]. What evidence do you have that they don’t?”
I don’t have any special knowledge. Just look at what’s been publicly reported.
September 2021 Bilt raised $60m at a $350m post-money valuation including from Wells Fargo and Mastercard https://techcrunch.com/2021/09/21/bilt-rewards-banks-60m-growth-on-a-350m-valuation-to-advance-credit-card-benefits-for-renters/
October 2022 Bilt raised $150m at a $1.5b value including from Wells.
https://techcrunch.com/2022/10/25/bilt-rewards-valuation-1-5b-renter-credit-card/
We know they raised at $3.1b in January 2024 and that they just raised at $10.75b so there’s significant (paper) appreciation. Their September 2021 investment (may have) experienced a 30x return and their October 2022 investment a 7x return.
Pretty simple to see they earned ‘hundreds of millions’. Bilt doesn’t release its cap table and the amounts are too small and immaterial to be public from Wells. They’re the two big names in the $350m raise, so you’d think they’d be in for $50m right? A 30x return (no dilution) would be $1.5 billion just on the first investment.
But let’s say they put in just $15 million, that would be worth $450 million today. And then they invested $5 million in the round valued at $1.5 billion. Both of those numbers seem implausibly low, but that’s the point. Let’s take the most extremely conservative estimates and what I’ve written still bears out. That $5 million is worth $35 million today. So a $20 million investment in this scenario is worth $485 million, for a $465 million gain. They walk away coming out ahead in accounting terms. We don’t know about any cash out opportunities, etc.
Their stake could easily be worth a billion…
Let me know when they start giving points on mortgage payments. Till then I just don’t care.
@Gary: A $10/month loss is what the WSJ documented. That is $480m since mid 2022. The claim “Wells Fargo (one of their early investors – who has made out very well on that side).” is not proven.
@BiltDifferent: “”From what I can gather from public info, they invested ~$20M across two rounds, one $60M round at $350M valuation and one $150M round at $1.5B valuation.”
Give sources.
@L3 – they weren’t losing $10m/mo was the reported loss by mid-2024, there was very little volume in mid-2022 [since Wells didn’t launch with Bilt until late March 2022]. In any case, even if they were losing $10m/mo at launch (not plausible, outside of expected and planned startup costs) you should check your math because it has not been 48 months since launch.
@Gary: Sept. 2021.
And $10m/month was their calculation of the average over the equity ownship period up to the reported date. Now, it is likely to be higher. That is why they are desparate to get out. I expect the poor prospects led to them accepting a relatively low price for their stake. Nowhere I have seen is it reported the WF sale was at the new valuation reported. It seems to be a serial transaction.
“In September 2021, Bilt announced a $60 million growth round that included Wells Fargo among its investors
wsj.com
+15
newsroom.biltrewards.com
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