Mortgage fintech company Mesa emerged from stealth on Tuesday with $9.2 million in seed funding and a novel idea for homeowners: The company offers cash back and rewards on all home-related expenses, including the mortgage itself.
Mesa offers original or refinance mortgages that include 1% cash back on the loan in the form of a credit card.
Additionally, Mesa offers a rewards credit card for homeowners that allows homeowners to earn points on mortgage payments and homeowner-related services such as homeowner association fees, utilities, repairs, home insurance and everyday purchases such as gas and groceries.
This is a standard unsecured credit card, meaning it is not tied to or secured by a home. The card issuing partner is Celtic Bank. Cardholders are not required to have a mortgage in Mesa to obtain the card, and the card's limit is determined by the applicant's credit history. The card also comes with a typical high credit card APR, currently in the 20-21% range.
“We're just taking what everyone loves about travel and dining cards and reinterpreting it for homeowners and parents,” Mesa founder and CEO Kelley Halpin told TechCrunch. “So instead of rewarding you for travel and dining spending, you get rewarded for gas, groceries, HOA, utilities, household supplies, and mortgage payments.”
Sure, homeowners can already earn points on these types of expenses just by paying with the rewards cards they already have, but Mesa's pitch is to structure the points more generously for regular homeownership costs: It will offer one point per dollar spent on mortgage payments, double points on gas and groceries, and triple points on home service categories.
Similar to the American Express rewards program, points can be redeemed in a variety of ways, including cash back, gifts, trips booked through travel portals, and to offset monthly mortgage payments.
Additionally, Mesa said it plans to eventually offer cardholders benefits such as discounts with home improvement contractors in its network and memberships to warehouse wholesalers like Costco and other discounts on products that homeowners and parents value.
“Homeowners will have access to premium benefits such as memberships to big box stores and discounts on home maintenance fees,” Halpin says.
Mesa is bucking the trend by tackling the mortgage market after high interest rates have battered the fintech industry. The deal was planned even before the Federal Reserve cut interest rates last week, but investments in such fintech ventures are at their lowest in six years, according to Crunchbase data.
Mesa is diversifying its risk by expanding into loan origination and credit cards. The company will earn revenue from a combination of interchange fees, interest income and affiliate revenue. For its mortgage products, it will generate revenue from lead generation for its financial partners.
Still, it's been a slow launch: Mesa wouldn't share any user or revenue figures, but Halpin said it was operating with an “invitation-only waiting list.” Now that it's out of stealth mode, the plan is to gradually notify people on the waitlist.
While some might argue there's no shortage of credit card options or mortgage referral services on the market, Mesa's founders have a conviction that comes from a combination of startup expertise and fintech backgrounds. Halpin joined Uber in its early days and went on to found three startups, selling one of them (Quantivize Health) for an undisclosed amount. Co-founder Peyton Hayslett has worked at a series of fintech companies, most recently at wellness credit card startup Paceline. Halpin said Mesa currently employs 13 people. Their resumes include companies like Robinhood, Block, Capital One and American Express.
Mesa is growing the company with $7.2 million in new seed funding led by Streamlined Ventures, with participation from Starting Line, Assurant Ventures and Vera Equity, among others. The company also received $2 million in venture financing from Silicon Valley Bank.