Austin-based rent reporting fintech Boom announced on Wednesday that it has raised $4.5 million in a seed round to improve user experience, expand its product offerings and market its app to customers.
The seed round was led by Chicago-based venture capital fund Starting Line, followed by Clocktower Technology Ventures, Company Ventures, Gilgamesh Ventures, and Plaid co-founders William Hockey and Zachary Perret. This latest round of funding follows a $800,000 pre-seed round.
“We’re gonna do three things with the resources: improve the core product of rent reporting; launch a couple of new products in the pipeline; and go to market, as we haven’t done any consumer and landlord marketing,” Rob Whiting, CEO and co-founder, said in an interview.
Boom’s app was launched in late 2021 to allow users to build credit using rent payments, which are typically their largest monthly expense. Boom reports the information to the three credit bureaus: Experian, Equifax and TransUnion.
Subscribers pay $24 a year for the app services, and customers link the app to their bank accounts so that the rent payments will be verified every month. While Boom does not work with users that have “handshake” rent agreements, it can verify whether customers pay rent to a relative, friend or roommate by checking wire transfers and the lease agreement, for example.
According to the company, users see an average increase of 28 points to their credit scores within two weeks of using the app when making their rent payments accordingly. The company says it’s offering its core product at a price 70% lower than its competitors.
Boom says it has between 15,000 and 20,000 subscribers and has attracted partnerships with major industry players such as Progressive, Apartment List, and national property management companies.
On-time rent payments have become another piece of the mortgage underwriting process in the U.S. over the last two years.
In September 2021, Fannie Mae incorporated customers’ rent payments into its underwriting system, known as Desktop Underwriter. Freddie Mac adopted the same initiative in June 2022.
A study by the Urban Institute found that Black households have the most to gain by including rent payments in mortgage underwriting.
