Entrata, a big vertical B2B SaaS company, filed to go public at the end of May.  Apparently, vertical SaaS is not dead yet!

What is Entrata?

Entrata focuses on the rental and multifamily housing market.  It describes itself as an operating system “that connects the broader residential ecosystem within a single platform, including owners, operators, residents, and vendors.”  In this ecosystem, its main customer is the operator, aka property manager, who may also be the owner.  Residents come next, as Entrata provides an application (Homebody) for residents and requires rent payments to run through its platform.  The vendor and owner parts of the ecosystem seem nascent.

Entrata is primarily an operating system for the property manager.  It includes the front office (e.g., CRM and resident experience), the middle office (e.g., property operations), and the back office (e.g., ERP and Procure-to-Pay).  The company says that in its largest deals in 2025, customers typically consolidated seven systems by moving to Entrata. Here’s a good summary of the primary products for operators and residents:

 

 

Entrata Financials

There are several excellent financial teardowns of the S-1, so no need for me to go into depth here.  See teardowns from Luke Sophinos, Alexandre Dewez, and Nima Wedlake.  The big picture numbers are impressive:

The teardowns will show you that:

• Entrata caters to the enterprise end of the rental market, with 233 customers having ARR exceeding $500k per year.  These customers accounted for 84% of revenue at year-end 2025, suggesting an average ACV of roughly $1.8 million. Entrata’s public competitor, AppFolio, caters to the smaller end of the same market.
• It’s a Rule of 47+ company.
• The company has strong gross and net dollar revenue retention rates of 97% and 117%, respectively, driven by unit growth and cross-selling in its enterprise segment.
• Entrata plays in a market that has produced multiple big winners: AppFolio, with a $6 billion market cap; RealPage, taken private in 2021 for $10 billion; and Yardi, which has never taken outside money.
• There’s some palace intrigue with the Founder and PE owners.

How Entrata Monetizes Its Ecosystem

I’m interested in how Entrata monetizes its ecosystem.  The S-1 helps, but leaves a few gaps in that regard.  Entrata reports two revenue segments: Subscription-Related and Embedded Technology Solutions.

• Subscription-related revenue includes monthly subscription fees from the operating system, which are charged per rental unit; rent credit reporting; utility services; and “payment processing fees, given that we require all subscribers of our operating system to use our payment solution for payments processed through our operating system.”  As a result, Entrata lumps subscription and payment processing fees together.  Entrata does not disclose Gross Payment Volume.  We also do not know the attach rates for rent credit reporting or utility solutions.  Subscription-related revenue is 86% of total revenue.
• Embedded Technology Solutions revenue consists primarily of fees for software-enabled services, including insurance, resident screening, and contingent insurance commissions from insurance underwriting partners.  This represents 14% of revenue.

Entrata monetizes the operators with its core subscriptions.  The company monetizes residents because many operators probably charge residents fees for certain payment types, rent reporting, and other services. The company also monetizes the ecosystem by acting as an insurance agent for residents.  There’s an aspirational mention of monetizing owners (who are presumably not also operators) and vendors, but not much evidence of this yet.  In short, there seems to be an opportunity to grow market share in the rental unit market, cross-sell modules, and monetize more of the ecosystem. Entrata also mentions entering other real estate segments and expanding internationally as additional growth levers.

What is Entrata’s Take Rate?

Even though Entrata primarily monetizes through subscriptions rather than payment volume, the company requires customers to use its payment solution, so it is fair to impute its take rate.  Entrata claims the US rental property market represents approximately $1 trillion in annual spend.  (Forty-six million renter households paying $1,742 in average monthly rent, 12 times per year.) We also know that Entrata customers serviced 2,440,976 units by the end of 2025.  This represents $51 billion in annualized rent flowing through Entrata-managed communities, based on the national average monthly rent.  Entrata’s total revenue was $509 million in 2025, implying a take rate of approximately 1% of rent payments if all payments really do flow through the system.  (Entrata also reports that its 2025 ARPU was $209.  The average unit pays $1,742 in monthly rent for 12 months, which is $20,904, so ARPU again works out to 1% of rent.)  Entrata reports, though, that its highest-ARPU customers generate $580/unit per year, which would make the take rate closer to 2.8% in this segment.

Does Entrata’s 1% Take Rate Make Sense?

In short, yes, when you compare to other industry platforms with software plus payments.  In my review of ServiceTitan’s S-1, its take rate was also about 1% with aspirations of 2%.  Toast’s net take rate was also about 1% as well.

Subscription Versus Payments Revenue

As mentioned above, Entrata does not disclose payments processing revenue separately from subscription revenue.  Entrata says this is because its subscriptions require clients to use the payments solution.  I suspect that is only part of the reason.  A bigger reason is that the pure payment processing take rate on rent payments is very limited.  AI estimates that for an Entrata-like customer base, renters’ payments come in the following forms:

• ACH: 60%
• Debit Card:  12%
• Credit Card: 7%
• Check/Money Order:  18%
• Cash:  3%

All forms of payment, except credit cards, are very hard to monetize as a percentage of value.  Few residents use credit cards, as operators don’t want to pay $52 per payment to accept them (3% of $1,742), and so they surcharge residents to use a card.  Residents don’t want to pay that surcharge, so they use their bank account via check, ACH, or debit.  Flat-per-transaction processing fees are the norm for these types of transactions.  At a flat $5 per transaction, this would represent only about 30 bps of the average monthly rent payment–and Entrata would net less than that after operator margin and processing costs.  Entrata does not want you comparing its payment processing fees to Toast or ServiceTitan, which have a much higher proportion of credit card payments and therefore a higher payment processing take rate.

Entrata sells a complete operating system that includes payments, rather than a payments solution that has some software attached.  It’s front, middle, and back office for the operator, so the subscription model makes total sense, though I still wish they broke out payments volume and revenue.  A boy can dream!