Daily Review: How One Silicon Valley Startup is Reinventing the Home Renting Experience

While one of the primary goals of technology is to extend and enhance the quality of services across industries to existing and previously overlooked customers, sometimes, tech innovation can have unintended consequences. One of the interesting stories to read today is about a Silicon Valley startup that attempts to tackle a complex home renting experience. Particularly, the roadblock many face in finding a new home in hot areas, such as San Francisco – the security deposit. The company brings together crowdfunding, cryptocurrency, blockchain technology, and payments.

The Technology That Aims to Disrupt the Security Deposit

  • Rentberry, an online rental marketplace, wants tenants to pay security fees in cryptocurrency and have micro-lenders cover most of the deposit.
  • Rentberry turns Craigslist into eBay, Kriston Capps describes. The service invites potential renters to fill out comprehensive online profiles and participate in an auction-style bidding process for housing—the best offer wins. As a result, in San Francisco and San Jose, Rentberry raised rents by 5%.
  • Today, Rentberry lists 220,000+ properties in 4,948 cities and is used by 120,000+ people.
  • Rentberry claims to have found a way to make security deposits cheaper for renters, hassle-free for landlords, and majorly profitable for anonymous third parties—all using cryptocurrency.
  • Rentberry’s deposit scheme works like this: Landlords will now be able to use the platform’s existing online marketplace to charge a security deposit on a property, using Rentberry’s personal cryptocurrency called BERRYs. Instead of paying the deposit in full, the renters just put down the first 10% as a deductible. Then, a community of micro-lenders – a crowd that can range from one to thousands of people—foot the rest of the BERRY bill. Those lenders, in turn, charge renters a yearly interest rate, typically 3-4% of the deposit. As with a normal security deposit, if the landlord doesn’t note any damage at the end of the lease, the initial deductible is returned in full to the renter, and the rest goes back to the lenders.
  • The benefit for renters is the liberated lost potential of their security deposits. There’s $500 billion in frozen security deposits locked away in banks now.
  • However, the freezer into which landlords park security deposits isn’t really that cold: In many states, landlords are required or advised to keep security deposits in an escrow account, where they’re also accruing value in interest.
  • Security deposits remain the major reason for filings in landlord-tenant court, said Steve White, CEO of RentPrep, a tenant screening service that has worked closely with landlords since 2007.
  • Most deposits cost a month or a month-and-a-half’s rent, which means that even for cheaper apartments, tenants must pay more than double their rent upfront to move in. Rentberry’s plan has the potential to offer rental opportunities to those who might otherwise be stopped by that high upfront fee, giving first-time apartment hunters a shot in a competitive market.
  • By using blockchain, Rentberry allows landlords to avoid the US banking system and forego escrow accounts, even in states that require them.

Image source: CityLab

  • Rentberry’s scoring system assesses landlords and tenants based on risk level. Renters, too, are subject to reviews and ratings, as well as credit scores, eviction history, and an intensive risk-level assessment based on evaluations from third-party companies.

Read more on CityLab.

AI/ML updates

IBM’s new Power9 chip was built for AI and machine learning

  • IBM introduced its AI/ML-powering chip – the Power9. IBM has designed the new chip specifically to improve performance on common AI frameworks like Chainer, TensorFlow, and Caffe, and claims an increase for workloads running on these frameworks by up to almost four times.
  • The company intends to sell the chips to third-party manufacturers and to cloud vendors including Google.
  • The company is releasing a new computer powered by the Power9 chip, the AC922 and it intends to offer the chips in a service on the IBM cloud.
  • The new chips are going to power a supercomputer called Summit being built by Lawrence Livermore and Oakridge national laboratories. The supercomputer will be built on top of thousands and thousands of the Power9 computers at a cost of $325 million.

Read more.

Payments updates

Google’s Tez payments app will soon handle your utility bills like a pro

  • Tez payments app is set to cross 12 million active users in India soon, and it’s getting some new features to make bill payment a breeze.
  • While Tez presently only lets users send and receive money between bank accounts, it’s set to receive an update that will let them connect to service providers – like cooking gas company, electricity board, mobile carrier, and broadband company – to retrieve billing history and pay off pending bills with just a couple of taps. Google has partnered with more than 70 major service providers nationwide in the aforementioned categories.
  • Once users add a service and enter the details with which they signed it up, Tez will automatically pull in previous bills, help complete your payments, and even notify of future bills when they come in.
  • Tez has processed 140 million transactions since its launch in September and accounted for 73% of UPI-based transactions in the country last month.
  • Next year, Google plans to add more functionality to make the app useful for independent merchants and small businesses (it already has 525,000 entrepreneurs using Tez for various kinds of transactions already).

Read more.

Unicorn Rising: How This South Korean PayPal-Backed Startup Churns $1B A Month

  • Viva Republica is the most disruptive FinTech startup in South Korea. After a $48 million PayPal-backed investment in March, its flagship app Toss has grown from a simple money transfer app to a platform of diverse consumer finance services generating $20 million in expected revenue in 2017.
  • Toss, now the fastest-growing mobile P2P payment service globally, has reached $12 billion transaction volume this year – an average $1 billion a month.
  • Putting that into context, Venmo, another PayPal-backed startup, took four years to reach the same rate and is currently processing $2.5 billion in monthly transactions. But Toss, with 12 million users, was able to reach that benchmark in about half the time and has sights on breaking even in the near future – a global first in the P2P payments space.
  • With the customer loyalty it earned through its P2P payments, users would expect the same robust user experience across all services on Toss. That allowed them to keep its customers on the app and adopt the new services. Its core revenue stream has shifted from its original product to the creation of new savings accounts.
  • Within 30 days of launching a mutual fund investment feature through a partnership with Shinhan Securities, Toss contributed 30% of the company’s mutual fund sales. Toss also began showing users their own credit scores to coach them on how to manage and improve their credit scores.

Read more.

Apple Pay Cash is rolling out for iOS 11.2 users

  • Apple was forced to release iOS 11.2 on Saturday due to a software bug. Now, Apple Pay Cash — one of the marquee features of the update — is being activated for users.
  • Apple Pay Cash lets users send and receive money directly through iMessages, similar to Venmo or Square Cash. Received money are stored on a digital Apple Pay Cash card in the Wallet app, which users can spend anywhere that Apple Pay is accepted, or send to other people. (The new feature is only available in the US for now.)

Read more.

Lending updates

Moody’s Analytics Launches the Lender Application Module for Banks

  • Moody’s Analytics has introduced the Lender Application module, a major release for its Lending Cloud platform that modernizes the loan origination process.
  • The Lender Application module comes with a built-in business rules engine that automates decisions. This expedites the lending process – especially for small business loans – by reducing time and resources spent on data entry.
  • The business rules engine also contributes significantly to consistency and greater control over the application of bank policies and guidelines across locations.
  • The module is designed for use within our Lending Cloud platform, a cloud-based credit management platform that enables banks to handle all aspects of commercial, agricultural, and small business lending. Banks can onboard customers with the Lender Application module to gather loan requirements anytime, anywhere via a mobile device.
  • The Lender Application module complements the MARQ™ Portal, which provides an online customer-driven loan application and communication portal for ongoing loan relationship management.

Read more.

Crypto updates

Revolut merges mobile banking with cryptocurrency trading

  • Revolut is merging traditional banking and cryptocurrency to let its customers buy, sell, trade, and hold Bitcoin, Litecoin, and Ether alongside 25 world fiat currencies.
  • Revolut‘s CEO Nikolay Storonsky announced that cryptocurrency trading will open to all Revolut users on Thursday. If you’re spending money through Revolut’s debit card and run out of fiat currency, it will automatically convert the necessary amount of cryptocurrency to fiat to fund your transaction.
  • When the feature opens up to all users Thursday, Revolut promises to offer the most competitive rates on crypto transactions, charging only a flat, up-front 1.5% without other hidden fees that can add up to 5% to 9% on other platforms.
  • In just two years, Revolut has signed up over 1,000,000 users in Europe and processed 42 million transactions, and claims to have saved customers $160 million in foreign exchange fees.
  • Revolut lets users send up to €5,000 per month in 16 currencies without any fee.

Read more.

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