Fraud Prevention Startup 100 Acquires Cobblestone

Proptech startup 100 announced Tuesday that it has acquired Cobblestone, a fraud-detection and income-verification company for the multifamily market.

The acquisition involved a mix of cash and equity funded by existing revenue, said Caren Maio, CEO and co-founder of Manhattan-based 100. Maio declined to disclose the price. 

Cobblestone is a fintech-grade fraud-detection and income-verification platform founded by engineers from financial underwriting platform Ramp, one of the fastest-growing startups in U.S. history, according to Maio. Jason Scharff, Manhattan-based Cobblestone’s co-founder and CEO, and Jack Mastrangelo, its co-founder and chief technology officer, will join 100 as strategic advisers.

“Their expertise is now embedded directly into 100’s verification and underwriting platform,” said Maio, who added that the Cobblestone name will go away with the acquisition. “We will be folding them into 100, so you will still see elements of the Cobblestone product, but you will see it living inside of 100.”

Scharff believes Cobblestone’s fintech fraud prevention success will translate to multifamily.

“Cobblestone was built from our experience as early engineers at Ramp, where we helped build some of the most advanced financial underwriting systems in the market and realized the real estate industry deserved the same,” he said in a statement. “100 is already category-defining. By bringing our underwriting experience into the platform, 100 has an unfair advantage that drives smarter decision-making and greater impact across the industry.”

Founded 18 months ago, 100 has gone from early-adopter curiosity to an enterprise staple, acquiring Cobblestone, sustaining greater than 25 percent month-over-month revenue growth, and adding some of the industry’s largest operators to its client roster, said Maio.

“We are designed to be an end-to-end fraud-prevention platform,” she explained. “That includes everything that makes up an individual proving that they are who they claim to be — identity, employment, background factors, etc. Given Jack and Jason’s fintech background, Cobblestone has done a tremendous job going deeper into the income automation layer.

“And, when you think about how artificial intelligence deep-fake technology is advancing, it’s exacerbating the problem, making it more prevalent, and lowering the cost of generating fake identities and documents. Cobblestone has built, particularly on the income side, a sort of data orchestration layer for how you verify income. I think it’s shown that you can fight bad AI with good AI, using the ability to look at multiple AI models, reading information on someone’s income, and using that to determine what that person can afford.”

The startup has been selected as the preferred partner in fraud prevention for multiple National Multifamily Housing Council top 50 firms, and 100 announced partnerships Tuesday with property management companies Asset Living and RAM Partners.

“Since deploying 100, we’ve caught 575 bad actors — fraudulent identities, credit protection number schemes, high-risk applicants — before they ever completed an application,” David Walther, chief revenue officer at Asset Living, said in a statement. “Assuming $7,500 per avoided eviction, that’s $4.3 million in NOI impact. Add in time savings and elimination of unnecessary costs, and the ROI case writes itself.”

Brenda Lindner, executive vice president and partner at RAM Partners, was equally enthusiastic about 100. “As a third-party manager, our job is to protect owner returns, and 100 delivers on that directly,” Lindner wrote in an email. “We’ve seen a 35 percent reduction in delinquency for residents who applied through 100. That’s not a soft metric. That’s NOI.”

Philip Russo can be reached at prusso@commercialobserver.com.