Property managers and consumer lenders are dealing with a reported increasing amount of application fraud. A Seattle startup wants to help.
Income verification startup Payscore recently raised $2.2 million. The startup, previously called The Closing Docs, helps users get a better understanding of a customer’s ability to cover rent or other recurring payments.
Payscore sells a service that reviews an applicant’s bank account, examines their deposit history, and generates a report that provides a comprehensive overview of their income. This includes paystubs, tips, gig economy work, and other factors. It offers a standalone income screening service, and the data can also be embedded into an online rental application.
Launched in 2017, the startup was co-founded by CEO Mark Fiebig, a serial entrepreneur and investment property manager. He’s joined by Chief Technology Officer Stephen Arifin, a former engineer at Microsoft.
Payscore’s software automates applications for more than 700,000 U.S. rental property units nationwide, as well as over 2,500 motorsports dealerships. Fiebig said there has been consistent demand for the service, with about 35% of households in the U.S. being perpetual renters who relocate every three years, according to Payscore.
The startup had an almost threefold increase in its customer base over the past year, Fiebig said.
Payscore — not to be confused with Seattle compensation company PayScale — charges $10 when it delivers a report, providing bulk discounts to its “power users.” It serves hundreds of customer accounts, including Marquette Management, Grady Management and Planned Property Management, among others.
The growth of the income verification sector in recent years coincides with a rise in application fraud and deception during the pandemic and broader market downturn. Eighty five percent of apartment property managers surveyed said they were attacked by fraudsters who faked their applications, according to Snappt’s 2022 State of Apartment Tenant Screening Survey.
Fintech giant Plaid is a competitor among income verification companies, alongside other well-funded startups like Truework, Argyle, and Pinwheel. Payscore differentiates itself from competition by delivering at a “success rate” that is 2-to-3 times higher as other players, as well as offering better customer service, Fiebig said.
The latest round was led by New York-based ff Venture Capital group. Other participants include SeaChange Fund, Hamilton Ventures and Alliance of Angels.
The startup, which is headquartered in Seattle but has a fully remote workforce, is on track to have 20 employees by year-end.
