Mortgage fintech Mesa emerged from stealth Tuesday with $9.2 million in seed capital and a novel idea for homeowners: cash back and rewards for everything they spend on their homes, including the mortgage itself.
Mesa offers home equity loans (original or refinanced) that include a credit card-style 1% cash back offer on the loan amount.
Mesa also offers a points rewards credit card aimed at homeowners, which allows homeowners to earn points when they pay for homeowner-related services such as mortgage payments, HOA fees, utilities, repairs, homeowners insurance, and everyday purchases like gas or groceries.
This is a standard unsecured credit card, with no home equity or mortgage, and the card issuer partner is Celtic Bank. The cardholder does not need to initiate a home loan in Mesa to get the card, and the spending limit on the card is determined by the applicant’s credit history. It also applies a generally high credit card annual interest rate, currently in the 20-21% range.
“We took everyone’s love of travel and dining cards and re-contextualized it for homeowners/parents,” Mesa founder and CEO Kelly Halpin told TechCrunch. “So instead of rewarding travel and dining spending, it’s rewarding gas, groceries, HOA, utilities, household goods, and mortgage payments.”
In fact, homeowners can earn points for these types of expenses simply by paying with the rewards cards they already have. But Mesa’s argument is that it’s offering a more generous point structure for common homeownership expenses: 1 point per dollar spent on a mortgage, 2x on gas and groceries, and 3x on home service categories.
Like American Express’s rewards program, points can be used in a variety of ways, including for cash back, gifts, travel booked through travel portals, or to offset your monthly home mortgage payments.
Mesa also said it will offer cardholders discounts at home improvement merchants within its network, or other items homeowners/parents value, such as memberships to warehouse clubs like Costco.
“Homeowners can enjoy premium benefits, including big-box memberships and home maintenance credits,” Halpin said.
Mesa is bucking the trend of fintechs dealing with the mortgage market after the sector collapsed due to high interest rates. Mesa was working on it before the federal government cut rates last week, but according to Crunchbase data, venture investment in these fintechs is hovering at a six-year low.
Through loan origination and credit cards, Mesa is diversifying its risk. It will generate revenue from a mix of interchange fees, interest income, and affiliate revenue. For mortgage products, it will generate revenue by generating leads to its financial partners.
Still, the rollout was slow. Mesa wouldn’t share user or revenue figures, and Halpin said it was operating on an “invitation-only waiting list.” Now that it’s out of the closet, the plan is to slowly let those on the waiting list know.
While you might argue that credit card options or mortgage recommendation services aren’t struggling in the marketplace, Mesa’s founders have a kind of conviction that comes from a combination of startup expertise and fintech background. Halpin worked at Uber when it was a startup, then founded three startups and sold one of them (Quantivize Health) for an undisclosed amount. Co-founder Peyton Hayslette has a long history in fintech, most recently at wellness credit card startup Paceline. Halpin says Mesa currently employs 13 people. Their backgrounds include Robinhood, Block, Capital One, and American Express.
Mesa is building the company with a new $7.2 million seed round led by Streamlined Ventures, with participation from Starting Line, Assurant Ventures, and Vera Equity. It also raised $2 million in venture debt from Silicon Valley Bank.
