Bilt is reportedly raising money at a $10 billion valuation. They last raised in August 2024 at $3.25 billion. For context, five years ago American Airlines AAdvantage was appraised at $18 to $30 billion.

Last June the Wall Street Journal reported that Bilt’s co-brand credit card partner Wells Fargo was losing $10 million a month on the card, and several observers mistakenly suggested that this meant Bilt wasn’t ‘working’. It missed important context.

• While internal Wells modeling may have suggested more non-rent payments and greater revolve, they knew what they were getting when they did the deal – it was part of an early push into co-brand. They were acquiring high value younger customers, and launching into the co-brand space, which meant paying more than competitors would have been willing to invest.

• Wells was also an early investor in Bilt, and is likely up significantly overall.

• Bilt had a long-term contract. While co-brand cards need to work for both sides, there was plenty of runway to adjust. And led by former Amex CEO Ken Chennault, they were in a strong position to do that.

I don’t know have specifics beyond what’s being reported on Bilt’s upcoming valuation. But what’s important here is something that I think is broadly missed in discussion of Bilt and also about several recent efforts at standalone loyalty programs that aren’t part of travel companies.

• It’s tough to start a loyalty program. You need to reach a large pool of customers. Airlines already have those customers, they’re captive on an airplane, and they love travel. Airline customers also skew high income. Banks want to reach these customers, and pay a lot to do so!

• What do you do if you’re a loyalty program without customers? RoveMiles is trying to interest customers by offering bigger rebates than competitors. That’s a tough game! What Bilt figured out was how to reach high value customers (young urban professionals, where they live) and offering a unique value proposition (no one else had rewarded paying rent, the biggest expense most people have).

• Bilt has taken this and turned it into a coalition loyalty program. It’s interesting that the former CEO of Amex is their Chairman – even Amex failed in its attempt to build a coalition program (Plenti). But Bilt has customers (they process rent in most of the buildings from major corporate apartment owners) and a valuable currency, they reach people in their homes, and can incentivize transactions with Walgreens, Lyft, neighborhood restaurants and a growing stable of partners. Bilt’s currency and tools can be used to target customers with points and better experiences.

None of this is a guarantee of future success, or avoiding bumps along the way. Bilt rolled out rewards for paying rent with any credit card, and then scaled back those rewards mere weeks later. We still haven’t seen their new co-brand card value proposition, or what rewards for paying mortgages will look like.

Four years ago I wrote that Bilt had a really innovative take in how to solve ‘the distribution problem’ and increasingly it seems right that this is their unique advantage, and it’s allowing them to build a large customer base motivated by their rewards, which is of tremendous value to partners.

In the meantime, for customers there’s a tremendous amount of value. As a Bilt Platinum I’ve enjoyed bigger points transfer bonuses than any other program has offered – ever – along with status from Air France KLM Flying Blue, free BLADE helicopter transfers, and a ton more.

Skeptics of the program have little reason not to participate. If you think they’re providing too much value to be sustainable, that would seem to be an even stronger reason to go all-in with the program (to benefit from the excess value they’re delivering).

(HT: Jonathan)