Bilt thinks it’s solved its ‘four-banana problem’ — and gamified paying your rent

Liz:
Welcome to Compound Interest from Semafor Business, a new podcast where we explore the way that business is changing in these subtle and seismic ways. Hi, Rohan.

Rohan:
Hi, Liz. Who do we have today?

Liz:
This week, we’re talking to Ankur Jain. He is the founder and CEO of Bilt, which launched in 2019 with this pretty simple idea of a credit card that gave you rewards points when you used it to pay your rent. Now, you’ve expanded since then into mortgages and student housing, kind of taken over residential real estate one block at a time.
But what it’s really trying to do is build this kind of lifestyle arcade for upwardly mobile millennials that would be me and Gen Z’ers, that would be Rohan. And where the tokens kind of are these rewards points and the games are everything you buy. So flights and restaurant dinners and workout classes and prescription drugs. So he’s the perfect person to ask about this evolution and business that I’ve been totally obsessed with, which is that every company wants to be a membership club. This sort of episodic commerce where I give a company money and they give me a thing, whether that’s a ski pass or a movie ticket, is being replaced by sticky commerce. I keep getting these ads for an urgent care membership, which is nuts. The thing you should buy as little as humanly possible is emergency room visits. But there is almost certainly some private equity firm trying to wrap all this up and a monthly subscription.

Rohan:
Always.

Liz:
Always. And the obsession on Wall Street with recurring cashflow is really what is driving a lot of this. You see it in the rise of this sort of subscriptionization of everything. You see it in the way that shareholders really value these recurring revenue models and really do not like at all lumpy windfalls. Even if they’re a lot of money, they just don’t want to deal with them or think about them.

Rohan:
Yeah. Gamification of life and recurring revenue. What could possibly go wrong here?

Liz:
Very 2026 story.

Rohan:
But it’s also kind of weird, right? We do this for things that people buy every once in a while, like a hotel stay, but the biggest recurring expense for every American in the economy is housing. People buy it every month.

Liz:
You’re totally right. Housing services, which is rent, mortgages, utilities, is like 12% of the economy.

Rohan:
Geez.

Liz:
You can think about that like a $3 trillion a year subscription fee for living in America.

Rohan:
Pretty big TAM.

Liz:
Totally. It’s huge TAM. That’s total addressable market for our non-Silicon Valley listeners. And it’s the kind of TAM that is a really juicy target, particularly when you are talking about the kind of adjacent spending that Bilt is going after. These are the neighborhood coffee shop, the sweet green downstairs. So I’m really excited to talk to Ankur about all that.

Rohan:
Well, let’s take a quick break and then we’ll come back and Ankur will join us.

Liz:
Ankur, thank you for joining us. Where do we find you on this? We’re in the middle of the blizzard of 2026. Where are you today?

Ankur Jain:
Thank you for having us. Listen, this is our day one at our new headquarters here in Meatpacking District of New York. And I have to say, it’s a good omen. We started off where we had the whole city to ourselves. I was impressed. I’m a mile away walking to work, but we had some team members who walked in from Brooklyn with a lot of excitement around the new space.

Liz:
When you’re making me look like a total slacker, I am doing this from home. Rohan braved the trip into Soho today.

Rohan:
Let’s be clear-

Liz:
Let us mic at the office. So you’re making me look bad already.

Rohan:
I was forgetful. Let’s not make it seem like you’re slacking here. I just forgot.

Ankur Jain:
No, I’m a mile away. These guys are the real troopers coming in from hour, hour and a half walks. It’s pretty-

Liz:
It’s that startup hustle. You got to earn that, what is it, $11 billion valuation? Your investors like to see the hustle.

Ankur Jain:
We can get a really nice new headquarters, but we can’t get comfy and cozy. It’s still very early days for the company and we want to continue to deliver.

Liz:
Let’s start there. Let’s start with what is Bilt and specifically talk us through what was Bilt 1.0 and where’s it going now?

Ankur Jain:
Bilt is a membership program for where you live. And it all started with this simple idea, which is housing is your single biggest expense. Housing is the single biggest decision you make, and it’s the center of your life. Where you choose to live drives where you shop for coffee every morning, where you go to your local gym, where you go to ... Which restaurants you tend to visit the most, what school districts your kids go to.
Where you live is the single most important decision and the biggest expense for consumers. And yet prior to Bilt, there had never really been a single platform or brand that focused on your home and where you live. And so Bilt, I guess we started 2019, almost seven years ago. Wow. And you think about it, people spend 30, 40 in New York even more percent of their income on rent every single month.
And prior to Bilt, that payment didn’t build anyone’s credit history, which is crazy. You didn’t earn rewards on it, which I think is silly that you can earn rewards buying a round of drinks at a bar, but not paying your rent every month. And when you think about the path to home ownership, renting really didn’t have any mechanism to move you closer to home ownership. And so those were some of the founding principles that we started this membership program on.

Liz:
And that question of why can’t you pay your rent on a credit card, it has an answer, which is that there’s a swipe fee and landlords don’t want to lose that 3% to the bank. And that’s a feature, not a bug of the payments world. What is the magic of the reward system that you’ve set up that kind of cracks that nut?

Ankur Jain:
Well, first to clarify, Bilt didn’t launch as a credit card program. So we were always about how do you make payments for your housing at your early days? When we launched in 2022 with a small handful of property managers and a co-brand card program, but the idea was whether you pay by ACH, whether you pay by check, whether you pay by debit card or you pay by credit card, how do we make it the most rewarding?
And one of the things we found was in the early days, it was really hard to get property managers to adopt our loyalty and payments program. Getting a building, an apartment building who, for all intents and purposes, they look at this and say, “Well, collecting checks works. Why break it? Why change things?” And so it’s a unique challenge to move a market like that into something new.
And so we spent three years, like I said, integrating into building systems, building out a rewards program, pitching apartment managers. And even when we started to launch and realized just how long it was going to take to get apartment managers to give us a shot, the really kind of breakthrough idea that got us into market faster was the card program where we said, “If in parallel to this, we go direct to consumers by giving them a credit card that they can use to directly pay their rent and earn points, then we can start to build a user base and a brand that will hopefully at the time help us accelerate our broader platform adoption for apartment managers.” And that’s kind of what happened. We just had no idea how big and how fast all these things can grow when we were first launching.

Rohan:
They’re established incumbents, right? Are you trying to take on ... I know Amex and their program has been an inspiration for you. Are you trying to take them on and be a sort of financial lifestyle company, or is it this ... You’ve made this argument before of being host for everybody who operates a business in a neighborhood.

Ankur Jain:
We think of ourselves as a commerce platform, not a payments or financial platform. And so if you think about it, again, I started this off by saying your housing is your biggest expense, but it’s also the center of where you live. And so when we think of our core business today, I’d say the closest comp of how Bilt has actually developed is probably something like Shopify, where Shopify powers online commerce by providing you all the tools and to set up your business and transact online.
With Bilt, we’re really about residential commerce, which is how do we power your apartment building, your home? How do we connect your home to the local coffee shop, the local restaurant, the local grocery store, the local gym? And we create a single platform where if you’re an apartment building, you can launch with Bilt and suddenly have a full resident experience platform to handle payment collections, rewards, amenity bookings, leasing, all of that.
If you’re a local restaurant, you can jump on Bilt and all of a sudden connect instantly with all the locals who live around the neighborhood and drive more business from all the apartment buildings near you that historically you’d have to go put flyers under the door or billboards. That was the old way this stuff was done.
If you go back, it’s funny, I was talking to my dad the other day who pioneered, funny enough, the Yellow Pages online back in the day. And I just think it was so funny because we’ve never made the connection that when he was doing Yellow Page, that was literally businesses driving local ads through a phone book that was pretty thick. And in many ways, what Bilt is now facilitating is actually connecting local businesses to local customers, but through your home.

Rohan:
So your customers then really are the businesses.

Ankur Jain:
Yeah. So our revenue and our business is driven through property managers, mortgage servicers, local businesses. But I think in many ways, like other platforms like Shopify or others, it’s by providing a service to the end consumer.

Rohan:
But then the differentiation, if I can push you a little bit, Shopify, I don’t really have a choice. If a merchant uses Shopify as their point of sale, I’m using Shopify.

Ankur Jain:
That is how Bilt works too. If you go into an apartment building, every single resident, when you live at one of these property managers that work in our network, whether that’s Related, or Brookfield, or Equity Residential, or Greystar, every resident that moves in is signing their lease through Bilt. They’re using Bilt to make their payments every month. They’re using Bilt to manage their amenities or file maintenance requests. We are the platform that operates that.
And now, more and more, so if you’ve gone out, I don’t know if you’ve been to one of our restaurant partners or a local Duane Reade or Walgreens, but every single guest at, say, take José Andrés, every single guest that checks into a José Andrés reservation, that entire experience is orchestrated through Bilt from the comped items that you get to the guest gifts they give you to the discounts they give you through to the checkout, which is powered by Bilt and then connects you to your whole neighborhood. So you can say, “Oh, charge it to my apartment building and just walk out.”

Liz:
Like living in a hotel. When you talk about it like that, it sounds more like an operating system for residential real estate. And that was the question around Toast or Square, which is that as a consumer, someone sitting down to dinner in a restaurant, I’m sort of agnostic as to what software the restaurant’s using to manage their bookings. Whereas if I’m an Amex holder, I’m acutely aware of the brand and there’s a lot of value in whipping out that card. And not that you necessarily have to choose, but are there pieces of both of those that you’re trying to put together, or are you totally fine being slightly anonymous, a non-verb company, but that provides this really valuable service in the background?

Ankur Jain:
We’ve taken learnings from both. And I’d say Bilt, again, because we are at its core, a residential commerce platform and membership program, when we come out at these brands, like you go to the José Andrés, it’s powered by the Bilt neighborhood checkout and the customer has a Bilt membership they can use at those locations.
What we said is we don’t want to be a financial instrument. We’re agnostic. If people like to pay by Venmo, amazing. If they like to pay by Amex, amazing. If they want to use our co-brand card, amazing. But Bilt is the connective tissue that connects it all together in your neighborhood. And so it is a, I’d say if you think of it like Amex Bilt a membership program around a credit card, we’re building a membership program around where you live, which is your home. And I think that is the fundamental difference.
And if you look back, I would say one of the things Ken has shared from his learnings, and to my partner at this business is Ken Chenault, who was the CEO of American Express for almost 20 years. And one of the things we talk about a lot is that there was a time before Amex decided to become a bank where they were debating if Amex should become the platform for all merchants to help them accept all payments. Can membership rewards be the rewards currency for the merchants that then it helps them interact with consumers, not just cardholders? They made a strategic decision in 2008 after the financial crisis to become a bank and really focus on being a cardholder-driven business. I think as Ken and I have grown Bilt, we have really focused on we want to be a member consumer-facing business through all payment acceptance, not limiting to just one credit card or debit card or payment method.

Liz:
It’s funny, Amex made that decision at a moment in time where it made a lot of sense and they run a great company. My guess is they have a higher multiple if they had gone the other way. There are some downsides to being a bank.

Ankur Jain:
There’s a reason Mastercard and Visa are valued the way they are, right? When you’re a network, it’s a different platform, but Amex is also a phenomenal business.

Liz:
Let’s talk briefly about that card. I know you say you don’t want to be a card company, but there was sort of infamously this for banana problem. And maybe I’ll actually have you explain it because it does sort of tell a fun tale.

Ankur Jain:
So one of the things we’ve done, just similar to how companies like Gap or Delta or even like Jimmy John’s will launch a co-brand credit card program, what that means is you can license your brand to a major bank and they can issue a credit card with special rewards at your business.

Liz:
Sure.

Ankur Jain:
Given that we were building out the largest platform for your home, we realized we had a chance to grow our member base by going directly to consumers with a card program. And in the process, the hope was that these customers would then engage even more with our network of apartment buildings or network of merchants, similar to how if you get the Gap or Sephora card, they hope that you drive more engagement with Sephora or Gap or the Amazon card at Amazon.
What was interesting is that when we launched this card, we discovered two interesting challenges. We launched our first co-brand card with Wells Fargo. On one hand, we had no idea the card was going to grow this fast. I mean, this was all part of a strategy. If you look back at our original deck in 2019, pitching property managers, we didn’t even have a co-brand card in it at the time, but the idea was if we could build a user base, we could then use that to go win properties.
Because we were the only player in the rent category, there was a lot of these optimizers, if you will, in the market who really have like 20 credit cards and they’ll jump between this card for dining, this card for grocery, this one for whatever. It’s a much bigger community than I ever thought.

Liz:
Yeah, you underestimated Reddit is what happened.

Ankur Jain:
Yeah. It’s funny, my cousin worked at Reddit for years and I called him. I go, “Why didn’t you call me five years ago and warn me about how does this world work? Bully.” Some of the most passionate members we have are these rooms, which has been a great learning lesson for us, but there’s a community of that. And usually, when people are doing that, they’re splitting that, consider that optimizing across five different cards for groceries.
Bilt was the only card for rent and we didn’t really have guardrails around that. And so people were coming in and everybody was using whatever optimization strategy they had and then built for rent. And so that group of 5% to 7% of users who are a very passionate, very loud community, they can really kind of upside down your P&L if you don’t have a strategy for how to handle that.
And so we took an evolution step in the last year, and as our rest of our business had grown, we relaunched our co-brand card to a new platform, really focused on how do you drive engagement in our neighborhood network. And as part of that, closed a lot of those loopholes that we had around rent.

Liz:
Not to put too fine a point on it, can you actually explain the four banana problem?

Ankur Jain:
We had a really simple idea, originally just keeping it the most basic of saying on the 1.0, if you look at the average customer, anyone who uses their card more than five times uses their card as their everyday card. That was kind of the original premise and the original card. Again, not factoring in this subset of optimizers.
And so we had a rule that you could earn your points on rent as part of using your card five times. And for the vast majority, 90%, 95% of our customers, that was perfect. They were choosing to use this card to earn rewards across all their spend, including housing. The 5% to 7% though used it for four bananas and rent. In hindsight, should have maybe predicted that, but it just really is a different use case than you’re planning for. And so that’s why I think you see with a lot of card programs, as we’ve learned with our bank partners, a lot of these guardrails around how they do different rewards.

Liz:
Yeah. Some credit card consultant owes you some money back on that advice. I mean, that is obviously not a good business for Wells Fargo, and you ended that partnership last month. You have a new issuer now. How do you make the card sort of top of wallet and not this spending nut that everyone’s gamifying themselves, or do you not really care?

Ankur Jain:
To me, the co-brand serves the purpose. Now, it’s about 10% of our customers get the co-brand card. Typical, airline is probably close to 20%, but they spend a lot more time on their card, as you know, like every ad is it. For us, it’s really more about now today as we go forward, we have almost six million members. We have today one in four apartment buildings running on the Bilt platform. We have 45,000 local merchants running on Bilt.
Our question is, how do we drive more rewards, engagement, and value for our customers when they’re in our network of our partners? And so the new card was really focused on that, and that is really our strategy. So everything is about how does this card drive more people to rent at our buildings, get a mortgage through our mortgage partners, get benefits at our restaurant partners, benefits at our gym partners, visit our pharmacy partners?
And in return, we believe that they can get the most value possible on their everyday life in their neighborhood through Bilt. And we’re seeing this today. We had, again, just in the first two weeks, we had almost 85% of our 1.0 active customers move to the new card. So already just kind of in line with what you saw in that optimizers versus not. And already, that population is over two and a half times the engagement on our card in the first month than we had before.

Liz:
And should we read into the new cards you launched? There are some tiers. I think you’ve got an Obsidian and a Palladium. Should we read that as the elbow at Amex Gold and Platinum that it appears to be?

Ankur Jain:
Chase has Freedom and Sapphire and Reserve and Amex has theirs and Citi has their, Double Cash and their Strata program. And Capital One has their Venture and Venture X and United has their Explorer and their whatever premium card. And I think it’s a similar approach and strategy.

Liz:
The thing I remember about those super high end ones is that you can’t cut them. And so when you lose it, even they send you a new one, you have to send it back. And for a while, Chase was like spending kind of obscene amounts of money like recycling the metal and the thing. Something to keep in mind on the product design side.

Ankur Jain:
I do think nowadays, I think all the major cards have some form of metal cards, so it’s like a-

Rohan:
Yeah, it feels like it.

Liz:
Well, it sounds good when you plunk it down. But to take a step back, rewards are, whether they’re through credit card or something else, are, at least to their critics, I think one of the great wealth transfers in the modern economy in credit cards, largely poorer people who revolve balances, subsidize all the lounges. In Bilt’s world, who is subsidizing all those perks that your members are getting? Where does that come from?

Ankur Jain:
So remember, our rewards and our membership program, there’s two things to note. First is that the rewards and benefits are funded by the property managers and the merchants. So this is not a bank program, it’s not a credit card program. Obviously, they fund extra rewards if you also use their co-brand card, if you use a Chase card, et cetera. But in this case, this is a local business saying, “How can I drive better customer experience and more engagement from people who live in the neighborhood?” Now, you could do that as a 10% discount like they used to do traditionally and go put up a flyer.
But don’t forget, a 10% discount is still a 10% cost to the restaurant or to the local coffee shop. And if you can create instead a rewards and customer experience for people who are nearby, they can say, “Hey, if someone who’s come in five times, I want to surprise them with a round of drinks.” And Bilt integrates into the point of sale system so we can automatically recognize the customer, push the round of drinks into the point of sale system and send Liz a text saying, “Hey, welcome back. It’s your fifth visit. We’re so excited to have you. We’ve just asked the kitchen to send you a round of drinks.” And all of that is orchestrated by Bilt’s platform.

Rohan:
The obvious pitch is for businesses also, I imagine it allows you to target high spenders or their kind of spenders really accurately, whether that’s through some sort of formal program or informal program. Is that a perk you offer merchants?

Ankur Jain:
It’s less about, how do I target this spend versus that spend? It’s how do you target people who live in my neighborhood? And so it’s quite cool. And in our platform, you can actually see in the property manager product or at the merchant product, a neighborhood of all the buildings around you and you can create benefits for people who live in that property and know that it will be seamlessly executed.
So you could say, “Hey, people who live in those buildings down the street from me, if they come in, we’ll offer them 5X points or a round of drinks or 5% off.” And that shows up in their membership that they get when they live at that building as a local benefit they have at that restaurant. And when they go, there’s no awkward, “Here’s my coupon or here’s my app.” It integrates seamlessly into their CRM system, their booking platform, their POS system.
And so again, if you go back to the Shopify example, there’s two parts to our product. There’s the main business which most customers don’t see, which is the backend system that drives it. And then there’s the membership, which is, if you think of it similar to the shop app that Shopify has been pushing out recently or Shop Pay, or Square with Cash App where you have Square powering the merchants, but as a Cash App member, you can see all of your benefits, your transactions in one place and pay. Similar model to that.

Rohan:
We all live in New York. I can go down around the corner from my apartment and go to Sweetgreen. If I’ve really felt so inclined, not that I’m a big workout guy, I could pick between Barry’s Bootcamp or a Pilates studio, but a lot of Americans don’t have that choice outside of say SF, Miami, New York. How does this scale geographically beyond just major cities where there are hyper local neighborhoods worth everything you could possibly want?

Ankur Jain:
Yeah. Today already, we have 45,000 local merchants on this platform. Don’t forget, New York, you may have more eclectic diversity, but these neighborhoods around the country are built on local businesses. You have most of the local restaurants, local gyms. And for them, it’s honestly much harder to reach customers than say like a SoulCycle even who we work with or a major entity like we work with Landry’s as well, but those are larger organizations with bigger marketing budgets to reach these customers.
Most of our partners are, it’s the local restaurant who wants to figure out how to drive bookings and drive more covers, and it’s really hard to do that. You don’t have a huge marketing infrastructure. Major food group has 30 to 40 people who just focus on customer experience and VIP.

Rohan:
One thing that just jumps out to me, is there not a tension between say a Duane Reade or Walgreens, which has tens of thousands of locations and how they surface on platform versus say a local pharmacy, a mom-and-pop around the corner? Is there a tension there?

Ankur Jain:
We work with both. And I’d say one of the things that Ken and I talk about this a lot is our orchestration platform, which is the backend side of our business, in many ways, we think of it as how do you democratize access to the best customer experience and hospitality to every ... Yes, the large guys can use it too to streamline their operations. But if you’re a local pharmacy, all of a sudden with Bilt, you can be executing marketing to the people from the moment they move into their apartment building. “Hey, would you like to transfer your prescriptions? By the way, we can also automatically file your FSA, HSA as a benefit through the Bilt ecosystem.”
And so again, if you think of it, there’s our membership which sits on top, which are people who live in our network of buildings. You have to use Bilt at these properties and you get the access to these member benefits. There’s our orchestration platform that drives customer experience and hospitality across the neighborhood, like a hotel, as you were saying, Liz. And then there’s all the integrations that sit underneath that make it seamless, right? So you don’t have to have 10 different people managing 10 different systems to make it really easy for you.
And again, just to simplify the experience, when you move into your home, we want your neighborhood to feel like a hotel property. You have your card on file. You ask downstairs for a reservation of the restaurant, they book you downstairs. You go to the restaurant, they bring you something that your favorite drink. At the end of the meal, you can charge it back to your room. You want to go to the gym, they can book you the gym. Everything is just tied together around where you live at the center.

Rohan:
Well, we have to take a quick break, but we’ll be right back with more from Ankur after this.

Liz:
You launched right before the AI moment that we’re all living in. How does that change either the premise or just the ability to execute it at scale?

Ankur Jain:
So we’re launching our neighborhood concierge, which is the first time ... Think of it like having a hotel concierge downstairs at every apartment building in the US. And you can text the concierge anything about your home, you need help paying rent, you have a leak in your apartment, you have an amenity reservation you want to make at one of the common spaces. We’re integrated and we handle that, but we can also help you find a local restaurant.
We’re plugged into the booking system so we can help you book the restaurant. We can help you book a car to the restaurant. But part of what we do is obviously, one, we take action. So the best AI in the market today gives you a lot of information, but it’s not hooked into the ecosystem around it yet. And honestly, a lot of these businesses will never let a third-party AI come in and just mess with their backend, right? But because we power that backend orchestration layer, we can actually take action on behalf of their customers.
And the second thing we do is we then personalize it. So if you’re a member through Bilt, you can opt in to have us personalize all of your neighborhood experience. And because we’re running the checkout experience at your local restaurant, but also your Walgreens and also your grocery delivery at your home, you can say, “Well, what would I like on the menu at this restaurant?” And we can, at the SKU level, personalize that for you and even gift it to you as part of the guest experience.
Everyone talks about the customer facing stuff like to your point, Rohan, at the very beginning, people talk about the membership and they talk about the co-brand card. You don’t normally see and think about what’s powering the backend of a lot of these restaurants and property management companies, right?
One of our board observers who was at our last meeting, he’s a CEO of a large real estate company and he was being a little bit of just giving me a hard time on the concierge. And he goes, “Sure, but you don’t understand the type of things residents ask our teams.” I said, “Okay, tell me.” He goes, “We had a resident write in to say, I just spilled wine on my wife’s dress. What do I do? And our site team had no idea what to do.” So I said, “I don’t know what’s going to happen, but let’s try and see what happens.” So we plugged into our Bilt neighborhood concierge. “I just spilled wine on my wife’s dress. What do I do?” And within seconds, it came back and it said, “Here’s how to clean it, spot it, don’t swab it, whatever.”

Liz:
Great.

Ankur Jain:
“More importantly, we’ve just found these stain removers at these grocery stores near your home. I can have it delivered to you within 15 minutes to your home address. Would you like me to handle that for you?” And it found an OxiClean bottle, you could click it, you could see it. I mean, it was pretty amazing how the integrations with our local providers worked and it checked the stock at the local store near your home. It was very cool.

Liz:
There was a whole generation of startups that was very consumer facing and trying to solve pretty dumb consumer problems and get huge valuations doing it. And a lot of them failed, but then a lot of them actually found that what they were was there was some enterprise value inside them that was way less sexy, but was where all the money is.
You have this sort of consumer brand that you’re building and this physical community that you are building, but you also sounds to me like you have pretty good software for landlords that may end up being where a lot of the value is. Would that be a bad outcome here if it turns out you just had this huge enterprise thing that you spun out or that became more of the company?

Ankur Jain:
To be clear, we’ve always been a B2B2C company since day zero. So our business has always been pitching housing owners on how we can improve the resident’s experience and drive more loyalty, more retention, et cetera. The approach to that in our opinion is not to be an accounting system or a backend system. We’re not competing with Yardi or RealPage or any of those companies. That’s not our business. We believe we can create the customer experience for these businesses. And that’s why I said it’s somewhere in between the Amex model and the Toast model. We’re a little bit more customer facing, which Shopify is now trying to do more of, as you’ve seen.

Liz:
I want to go back to where we started, which is this idea and it’s why we wanted to have you on the show that every company wants to be a membership club now. And it started with hotels and airlines, it’s just totally contagious business model. Is that good? Whatever happened to just basic anonymous commerce where I go into a store and I give them my money and they give me that thing. Why is this a good thing?

Ankur Jain:
No, you can still do that.

Liz:
It’s getting harder. Every time I go and use my car on the little tablet, it pops up and somehow I didn’t know, but they have my cell phone number and it’s probably been sold to some telemarketers. I mean, there’s some fair consumer angst about that trade off between ease and personalization and whatever dystopian nightmares at the end of that road.

Ankur Jain:
At the end of the day, everything, it’s about customer choice. And our approach is you sign up for the Bilt membership and opt into our program and you can have a personalized experience where I think, look, for the majority of customers, you want convenience, you want access, and you want value. Those are the things that we put at the core of our customer experience for our merchants and properties.
And so can we make it easier? So when you walk into an apartment building, they already have your account. You can be pre-approved for the lease. You can use your existing card on file to pay. That’s, I think, more convenient than the old model of filling out tons of paperwork, scanning your bank accounts, writing a paper check to get your security deposit in. You can still do that, and we process that for the building.

Liz:
Wait, how much of your customer base pays by paper check? I’m obsessed with people who still use checks.

Ankur Jain:
Look, my mission is I think if housing is the last reason that people still own checkbooks, in my opinion, and we have mostly digitized that through Bilt. There are some parts of the country and some areas more so on affordable housing where we still handle high single digit percentages of checks. But for the most part, we’ve brought that down to little single digits.

Liz:
It’s like rents and bat mitzvah cards. I think that’s the last check I wrote.

Ankur Jain:
Even bat mitzvah, people are Venmoing now.

Rohan:
My dry cleaner, check only.

Liz:
I love that. Let me ask you a nerdy question that may only end up being interesting for me, in which case we’ll cut it. One thing that sort of set off this contagious business model of loyalty was that during the pandemic, the airlines borrowed against their frequent flyer programs because they needed money. And that put a very clear and very big dollar figure on what loyalty was worth. And I don’t know, did that in some way enable Bilt to go out and say, “We can actually build a big business on this,” looking at those huge valuations that those programs got?

Ankur Jain:
So probably less the airlines specifically, but COVID was in many ways one of those Black Swan moments, which I think enabled Bilt to launch. And so we’re not the first ... I’m a big believer. Ideas are not the reason companies succeed. Ideas are a dime a dozen, right? It’s timing, execution, the right partnerships in the right place.
We spent a long time building this idea out, even in 2019. When COVID hit, it was the first time that property managers, rewards partners, merchants were even willing to give Bilt a chance because people were literally sitting there, they had no idea where the world was going. And it was, “Are people going to pay rent on time this month? Are people going to pay rent at all this month?”
People were talking about giving out one month, two month, three month concessions for the first time in ages, and all of a sudden, a new way to issue rewards started to seem really compelling. And like all these things, you have a cold start problem where often you get the first one is really hard. If it wasn’t for COVID, I’m not sure we would’ve gotten the first set of customers to give us a shot. And then it still took time, which then led us to the co-brand card, which then led us to everything else. But I don’t even know if we would’ve gotten the first partners had it not been for that.

Liz:
Interesting. What happens to the value of loyalty and to your business, particularly if agentic commerce takes over? Will customers care less about Hilton and Delta points when their bots are just making all their plans in the background? And then doesn’t your currency kind of be at risk?

Ankur Jain:
Our currency is still also a relatively small part of what drives our business. So people are paying us to orchestrate the entire customer experience. So for apartments, we manage the tenant screening, the leasing through to the resident app and the resident concierge where you make your payments, file your maintenance requests, go on.
I think rewards are a whole ... It’s all about guest experience. So that’s points, but it’s also how do you do surprise and delight moments? How do you send the right message at the right time that made people feel special? How do you take care of something seamlessly that they otherwise couldn’t have taken care of?
I don’t think those things are going away. If anything, I think people are putting a bigger premium on hospitality and you see that just in the luxury space, people are paying record amounts for personalized guest experience, better hospitality, and you’re seeing hotel prices go up, travel prices go up, everything where people can get the experiential side more. I think Bilt is enabling that for every customer. And so if there’s anything people are willing to invest more in, I believe, it’s how do I get treated better, how do I get a better experience? How am I getting more value? How am I getting more access?

Liz:
You wrote this essay in 2017 that was a real indictment of the last venture boom. It gave early voice to this idea that has since in the last two years or so, totally taken off that VCs were trying to solve stupid problems. I don’t know, making tech-enabled juicers or something. And we’ve really seen a shift into these big seismic industries, notably defense and energy. And I’m curious of whether you think that message got internalized in Silicon Valley and does venture, which is a pretty small industry that has optimized for very different things, like have a right to win in this sort of new investment world?

Ankur Jain:
Yeah. So I think, unfortunately, the majority of venture capitalists I think are Lemmings, not trying to solve real problems.

Liz:
Okay.

Ankur Jain:
By the way, I think unfortunately, the incentive structure is set up to do that. I remember someone once told me, I remember I was sitting with a venture capitalist and they were asking about a really interesting investment in a pretty major world-changing breakthrough healthcare category. And he goes, “Yeah, but everybody right now is focused on crypto. If I invest in that and it works, like everyone else is ... We’re all going to make money together. If I invest in this other idea you’re telling me about and it doesn’t work, I’m the guy who was crazy and was dumb.” And he said, “There’s no strikes called in venture,” which I just found a painful mindset.
Now, I’d say that the best of the best investors in this world are the ones who just take big bets and go. And you see that. Guys like Joe Lonsdale who will go out and take big swings and categories before it’s popular. And I think I have a lot of respect for that. You see Hemant at General Catalyst, who’s doing the same thing. But I’d say most the industry is just what is the safest way to get into a round that everybody else is already talking about., Because if I then get a markup, I go back to my LPs, I raise another fund, I get my management fees and you just got to spiral.

Liz:
Yeah. And obviously, your investors are bought in. When you, I assume, occasionally got told, no thanks, what was the most common reason?

Ankur Jain:
So we were, I think, fairly lucky. And this goes back to my lessons from that past companies. I’ve made the mistake of raising money from venture capitalists at my last two startups. And I would not advise any founder to take money from venture capitalists until your business is far more mature because of the misalignment of incentives. Part of the reason we took three years and we were able to take three years to launch the product this time around was that we didn’t raise venture money. We only raised money from commercial partners.
So we said, “Hey, if we’re going to build a product for real estate owners, our first investors were AvalonBay, Equity Residential, related companies, Blackstone Real Estate, Camden Properties. These were partners that cared more about our product, delivering to the needs they had versus some fake markup on paper.” And it was great. And then you have people who are totally aligned interest with you.
And now even today, most of our investors at the later stage are sovereign wealth funds and institutions. It’s Vanderbilt Endowment and University of Illinois Foundation and Ontario Teachers Pension Plan. It’s large institutionals who are thinking, “How do I create 10-year, 20-year wealth for their pensions and their countries and their sovereign wealth funds, not how do I get a markup for my next round?”

Liz:
Seems like it might be due for a sequel to that essay. Publish it on Semafor. We’ll put it on the internet for you.

Ankur Jain:
Yeah. There you go.

Liz:
Is it true there is a four banana sculpture somewhere?

Rohan:
I saw a photo of this, but I didn’t vet it. What’s going on there?

Ankur Jain:
We’re just having to follow it. I’ve actually really come to appreciate our Reddit community. We have a top 4% Reddit community across Reddit, which is pretty amazing. And even though it sometimes ruins my sleep at night, it is really, really cool to have people who care so much about a brand and a product.
And so part of that is also not only hearing the feedback, but also just having fun. And we know that the four bananas is a thing. We’re not trying to pretend, we’re not angry at anybody. People played the game and I respect it, and that’s our fault, right?

Liz:
Just think of all the marketing dollars that saves you. This is like what Tesla always says, “Yeah, yuan is a real tiger by the tail, but we’ve never bought a single ad.”

Ankur Jain:
We just had fun with it. Yeah. When we launched a new card, we created a beautiful art piece, the four bananas and we let customers redeem for it with points that they had earned from their four bananas and we shipped it out to people.

Liz:
That feels like a great place to leave it. Thank you so much. This was really fun, Ankur. We appreciate it.

Ankur Jain:
[inaudible 00:40:18] you guys to play with our concierge. It’s like the first time I think people are going to fully appreciate the depth and breadth of integrations that we’ve built over the last few years because it just comes to life in ways that traditional AI just can’t do.

Liz:
I’ll tell you my most analog problem and you tell me if you can solve it, which is that I do not live in a Bilt building. I live in a Brownstone in Brooklyn and I’m apartment three, but there’s a garden apartment, which is one. And so I’m constantly getting the doorbell for apartment two. There’s like signs. It doesn’t seem like it’s a solvable problem and it’s just like the architecture of New York is just like, it’s aligning against me.

Ankur Jain:
Maybe we’ll build a doorbell system. We haven’t done that yet, but we can look into that.

Rohan:
That’d be great.

Liz:
Yeah. You know what? Ring is having some bad press. So maybe you can make a slightly less panopticon version of Ring that makes my life easier. Well, thanks so much, Ankur. We really appreciate the time. This is a lot of fun.

Ankur Jain:
Thank you guys so much. Good to see you.

Liz:
Well, Rohan, you are both younger and cooler than me and live in a cooler part of New York than I do. Do you have a Bilt card? Do you have a Bilt membership? Does it sound like something you would do?

Rohan:
I will agree with younger and all the others. I don’t, but I’m also like ... I love the points game. I don’t play the points game as much as I should, but I was really struck because when I came into this, I thought Bilt was like a card company. That’s like what I see, that’s where I see it out at restaurants and stuff, but it’s really not at all, it sounds like.

Liz:
They use credit cards because for whatever slightly disappointing reason, that is the axle around which our economy spins. There are a lot of countries where that is not true, but we are a plastic nation. It’s the way to reach most people, particularly I think the kind of young, upwardly mobile people. Not all of whom play the game as aggressively as what do you say that five banana, four banana crowd.

Rohan:
The Redditors, just the Redditors writ large.

Liz:
But it is a real sort of driver of commerce. And it’s interesting to me the way he’s talking about it. When you talk about rewards, essentially people who carry a balance from month to month and pay a lot in interest for a pretty unhealthy product and credit cards subsidize all of our airport lounges.
And if he has managed to crack the virtues of a rewards ecosystem without that, and it sounds essentially like he’s creating enough value to merchants basically who spend on customer acquisition anyway and property managers who maybe now don’t have to collect a bunch of checks and go to the bank, that he can create that value and then share that with people. That seems like both an intriguing product and less usurious than the rewards credit cards system that we’ve all come to accept.

Rohan:
Definitely. There is something really interesting in that he’s basically managed to convince people who operate on incredibly tight margins, like pharmacies and real estate companies that they should let him or them subsidize this. And he also makes money off of this, but I don’t know. I’m just still hung up on how much of their business comes from like the Relateds of the world or whoevers of the world. It’s really surprising to me.

Liz:
There’s going to be two tensions there, right? And you asked a good question about Duane Reade versus the corner of pharmacy, but the problem is that it is just way easier to sign up big national merchants than to have a sales force that is out there knocking on the door of Neergaard Pharmacy over on 7th Avenue in Brooklyn here. And so there is going to be pressure to become these big national chains and to some degree happen with the food delivery systems. I remember when you couldn’t get McDonald’s on food delivery, you had to go to McDonald’s.

Rohan:
The make delivery. Yeah.

Liz:
Yeah. And now it’s sort of become ... There’s still obviously good local choice on those things. And I’m not a huge food delivery person. I think it is like a societal toxin, but-

Rohan:
I’m sorry to disappoint, but I am.

Liz:
See, this doesn’t surprise me at all. This is why I thought you might be a Bilt member.

Rohan:
Touche.

Liz:
But I think keeping, particularly in places like New York where you do have this very local flavor, I could see it working. But I tried to press them on this a little bit and they’re trying to do two things. They have this lifestyle company. I’m sure they would love for Bilt to be a verb in some way. What exactly would ... I’m going to build that. I don’t know.
And I’m sure there’s a lot of value in that and it’s certainly fuzzy and can really help knit your customers to you. But it sounds to me like there’s another probably way less sexy, but like more valuable business inside this, which is taking, as we talked about at the top, 12% of the economy and processing the payments for that. And I don’t know, you see companies all the time realize that actually the fun direct to consumer thing they were doing wasn’t really working, but like, boy, do they have a gem over here in enterprise software?

Rohan:
Think about Slack. Slack started as the chat for a video game that failed and picked up by Salesforce for 30 billion.

Liz:
And to some degree, Square is like that too, right? They have this restaurant management software and then they have the Cash App. Sure. Okay. And by the way, airlines are to some degree like this. They are credit card companies that have a money losing side hustle flying people around on big tin cans in the sky. There’s not a tension you can do those two things, but as you know, as he’s trying to grow and sort of decide where to invest in the business, I will be curious. Because as a venture investor, and I realized he didn’t take money from those knuckleheads, of course.

Rohan:
Of course not.

Liz:
But from an early stage investor, you can get swept up in the network and the buzz and a consumer company that runs Super Bowl ads or whatever. As you grow and you get bigger and you’re talking to particularly private equity, private capital, big institutional money, they would much rather invest in just like a super boring, super profitable enterprise software company for the moment anyway. And so I’d be curious to see how those two sides of the business grow.

Rohan:
There is going to be a problem that they’re going to cross at some point where they might sign up both Uber and Lyft and one of them is going to be more willing to pay for preferential treatment here. And that’s like a lot of risk for ... They’re trying to be middlemen, but they’re also not really middlemen at all. They’re very enmeshed in all of this. And at some point they’re going to have to start playing favorites here.

Liz:
Yeah. And as I think he was saying, optimizing your whole business for your long tail of power users is just not a great idea.

Rohan:
Oh, totally. And we didn’t really get a satisfactory answer on geographics, because New York, SF, Miami, to a certain extent, probably Austin, these all make sense. This is where Related is building. There’s a naturally growing element of the population that is going to be super game to be in this Bilt ecosystem where you’re a tech worker, you’re a finance worker, you want your life to be as easy as possible. How does that scale or translate to Des Moines where you’re driving everywhere, you’re not necessarily walkable, probably don’t make as much money? I don’t really know that he had a clear answer to that, but-

Liz:
It’s not obvious to me. And his pitch is obviously strongest when he says, “You should be able to treat your immediate block like a hotel.” That it has a concierge and that you can build stuff to your room and we can just all be on permanent vacation in our heads. Look, people in the rest of America do choose where to go to dinner and they have lives.

Rohan:
I wasn’t saying that.

Liz:
I don’t about you. I grew up in real America, so I’m-

Rohan:
I grew up in Suburbia.

Liz:
I do think the pitch is obviously strongest in these big urban centers that have young people who spend a lot of money and are pretty social and we’ll see where it scales, but he said they’re national and you’ll see if they have some plans to go global. But as we said, the TAM here is enormous.

Rohan:
Huge.

Liz:
We all buy a lot of stuff. And we do it in a slightly confused way that is often not to our financial advantage. And I’ve always thought there’s money to be made building an app that knows where I am. I would be willing to give up a little bit of privacy for that and tells me which card to use.

Rohan:
I mean, you could definitely vibe code that, Liz. You could definitely talk to Claude and-

Liz:
You can vibe code it. That feels like a good weekend project.

Rohan:
You know I’m a lot of it when it comes to AI. Okay, there was one last thing, and obviously they’ve got Ken advising them, but you started to go down this path and I’m curious what the actual answer would be. I wish I actually had asked them.

Liz:
Can you ask me if I think Amex buys them?

Rohan:
Actually, yes. As an M&A reporter, that would be my second question. My first question is, what’s to stop Amex from doing just that? From becoming the platform for everything, for saying, “Hey, we know our interchange fees are really high. Mom-and-pop restaurant or Tahoe Hospitality or Thomas Keller, we’ll cut you a 50 basis point deal if you start using us as your payment platform and as your platform for everything.” What’s the moat there?

Liz:
Part of the moat is that it is harder for established companies to subsidize growth because they have grown up investors who don’t love that. That’s sort of a feature of a young company. It’s burning money and bringing in customers. Bilt sort of interestingly had Wells Fargo subsidize with growth for them, which must be nice. That may be it.

Rohan:
So you do think Amex buys Bilt?

Liz:
No, no, no. Capital One just bought Brex, right?

Rohan:
It’s true.

Liz:
There are these big sort of financial services businesses that crack a code that the incumbents can’t quite get there on their own, but those deals are expensive and hard.

Rohan:
They are.

Liz:
If he sells, we’ll have him about to talk about why. But no, I think look, he’s got a real theory of the case. This idea that everything is commerce and the way we just buy stuff is changing often by forces that we’re not really aware of at all. I think it’s just, I don’t know, it’s a good yarn.

Rohan:
That’s it for us this week. Thanks for listening to Compound Interest from Semafor Business. Our show is produced by Josh Billinson.

Liz:
With special thanks to Anna Pizzino, Claire Einstein, Katherine Bilgore, Rachel Oppenheim, Chad Lewis, Tori Kuhr, Garett Wiley, and Daniel Hoeft.

Rohan:
Our engineer is Bob Mallory. Our theme music is by Steve Bone. If you like Compound Interest, please follow us wherever you get your podcasts and feel free to review us.

Liz:
And if you want more, you can always sign up to get Semafor Business in your inbox.