Austin-based fintech startup Boom has raised $4.5 million in a seed funding round. The company plans to use the capital to improve its product, introduce new features, and expand its market reach.
The round was led by Starting Line, a Chicago-based venture capital firm. Other participants include Clocktower Technology Ventures, Company Ventures, Gilgamesh Ventures, and Plaid co-founders William Hockey and Zachary Perret. Previously, Boom had raised $800,000 in a pre-seed round.
According to CEO and co-founder Rob Whiting, the company will focus on three areas. First, it aims to enhance its core rent reporting product. Second, it plans to launch new offerings currently in development. Finally, it will invest in marketing efforts, especially targeting consumers and landlords.
Boom launched its app in late 2021. The platform allows users to build credit scores through rent payments, which are often their largest recurring expense. It reports payment data to the three major credit bureaus: Experian, Equifax, and TransUnion.
Users pay an annual subscription fee of $24 to access the service. To ensure accuracy, customers connect their bank accounts to the platform. This allows Boom to verify rent payments on a monthly basis.
However, the platform does not support informal rental arrangements without documentation. In cases where users pay rent to friends, family members, or roommates, the company verifies payments through bank transfers and lease agreements.
The company states that users typically see an average increase of 28 points in their credit scores within two weeks, provided payments are made on time. In addition, Boom claims its pricing is about 70% lower than comparable services in the market.
Currently, the platform has between 15,000 and 20,000 subscribers. It has also formed partnerships with companies such as Progressive, Apartment List, and several national property management firms.
In recent years, rent payments have become more relevant in mortgage underwriting in the United States. For instance, Fannie Mae added rent payment data to its Desktop Underwriter system in September 2021. Similarly, Freddie Mac introduced a comparable initiative in June 2022.
Moreover, research from the Urban Institute suggests that including rent payment history in credit assessments can particularly benefit Black households. This shift indicates a broader move toward more inclusive credit evaluation practices.
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