Circa raises $2M on its mission to ‘reinvent rent’

Circa, a Brunswick-based fintech startup, has raised $2 million to accelerate its growth in the residential rental industry.

Investors in Circa’s seed round include Maine Venture Fund, Techstars, Hub Investment Group, as well as several angel investors. TechCrunch was the first to report on the company’s seed round.

The company, which recently relocated from Connecticut to Maine after graduating in December from the Roux Institute Techstars Accelerator, has built a mobile- and web-based platform that reimagines the way people pay what is most often their largest monthly expense—their rent. It does this with flexible payments, credit reporting, and arrears planning.

For property owners, Circa’s platform simplifies rent collection and improves resident relations. With the majority of rent payments still made by check, Circa says its modernized process has shown a 4X improvement in both on-time rent and arrears collection for its customers.

“At Circa, we observed the changing relationship between renters and property owners, and how their challenges were evolving. With all of the foundational issues and modern demands in mind, we went back to the drawing board and designed a completely new model for how rent is paid and collected,” Leslie Hyman, co-founder and CEO of Circa, said in a statement. “We created a genuine win-win situation that helps renters pay their rent on time, secure housing stability, and improve their credit, while property owners collect more rent more efficiently, avoid evictions, and cultivate community.”

Hyman, who is 61, spent her career in corporate America, working in the insurance industry. She met her co-founder, Heman Duraiswamy, while working at Swiss Re. He was a software engineer building a copayment system while she worked in business development. Their idea for Circa was born out of conversations about how to make it easier for insurance customers to not fall behind on their payments.

Paying late under threat of eviction is a challenge for approximately 30% of U.S. households that rent, according to Circa. Hyman and Duraiswamy realized that challenge could be addressed by giving renters more flexibility and choice over how and when they pay their rent. Rather than being forced to come up with the full amount on the first of every month, renters can use the Circa’s app to set up payment plans, allowing them to spread their payments over several installments. The app also offers renters the convenience of paying from a bank account or with a debit or credit card. An added bonus is that Circa reports successful, on-time payments to the credit bureaus, providing residents a boost in their credit scores.

“The key to Circa is the convenience and simplicity for the user. It better fits into how we pay for things in a modern world. Circa also has an amazing social impact component that could affect millions of households by bringing housing stability and improved potential for upward mobility,” said Lars Perkins, managing director of the Roux Institute Techstars Accelerator.

The company has gained significant traction, onboarding residential properties around the country ranging in size from 10 to 10,000 units. The company makes money by charging property owners $1/unit per month, as well as a small convenience fee paid by renters who choose to pay their rent with a flexible payment plan (under a revenue sharing agreement, property owners also benefit from this convenience fee).

“We’ve tried really hard to improve our renters’ experience, but a lot of the solutions in the market are incremental,” said Demetre Booker, managing partner of San Diego-based Elevate Commercial, which manages nearly 3,000 units. “It means patching together multiple offerings from multiple partners. Circa is a one-stop offering that goes beyond a sum of its parts. They walk the walk when it comes to revolutionizing how rent is paid and how our renters feel about being a part of our community.”