A fast-growing fintech startup that protects landlords and tenants from liability for property damage aims to do more to promote equity and financial well-being for renters.
Foxen, one of Central Ohio's fastest-growing private companies, has turned a profit since it debuted in 2018, but a $44 million private equity round this month adds expertise to the board and shores up the balance sheet ahead of "aggressive" hiring plans, co-founder and CEO Jay Harkrider said.
"We didn’t need to take on the funding," Harkrider said in an interview. "Honestly we did it to be aligned with smart people who have experience scaling a technology company."
Growth equity firm Summit Partners, of Silicon Valley, led the Series A, with participation from New York City-based Level Equity.
Foxen spun out in 2018 from Columbus-based Coastal Ridge Real Estate, an owner-operator of multifamily and student housing. Harkrider also is a co-founder of that firm.
At first Coastal was trying to solve an internal problem: Tenants who canceled renters' insurance even though it was a lease condition. But it's a universal problem to the industry. Harkrider left the real estate side in 2020 to run the tech startup full-time.
Insurance for the property owner typically has a $100,000 deductible, so landlords are on the hook for fires or other damage below that threshold – or have to go after the tenant to pay.
Foxen integrates with the IT platforms that most property management companies use, automating the process for tenants to upload proof of insurance and monitoring if it stays in force. If the policy lapses, Foxen automatically enrolls the tenant in a waiver program, paid with a rent surcharge.
Clients now comprise 350,000 units, tripling over the past year, and the company aims to hit 1 million this year. About 70% of tenants choose the Foxen waiver instead of outside insurance. Damage losses have been low throughout its four years of operation, Harkrider said.
There are some 25 million rental units nationwide, so there's plenty of room to grow.
Rentistry can improve credit scores
This year Foxen added a product that Harkrider believes could get even bigger: Rentistry, a rent collection tool that simultaneously helps tenants improve their credit scores.
Mortgage companies automatically report homeowners' payments to credit bureaus, but renters don't get credit for what's often their largest monthly bill. Foxen creates that reporting capability, and can help landlords meet corporate social equity goals, Harkrider said.
"Why would you not give a renter the ability to raise their credit score?" he said. "I really believe that’s a product that’s going to spread really, really fast and be industry standard in a few years."
Foxen is exploring a product that eliminates the need for security deposits, Harkrider said – another equity-builder because that upfront payment can be a barrier to obtaining housing.
Foxen adding jobs in Columbus
Reincorporated as Foxen Holdings Inc. in Delaware last year, the company is based in 80 on the Commons downtown with a satellite in Santa Barbara, California.
Foxen has 50 employees, up from 30 at the beginning of the year, and expects to end the year with about 100. It's hiring in sales, engineering and customer service.
Revenue was $2.9 million in 2020, up from $860,000 its launch year, which made it No. 11 among the region's fastest growing companies by three-year revenue growth in Columbus Business First's Fast 50 awards last fall, the first year the startup was eligible.
Foxen someday could pursue acquisition or going public, Harkrider said, but not yet.
"I’m having a ton of fun building what we’re building, and the sky’s the limit for where we could go," he said.
