Andreessen Horowitz and Tiger Global Divvy Homes are selling for parts of Brookfield Properties
Starting a rental Divvy Homes has bought Charleston, South Carolina-based Maymont Homes in the event of a fire, according to multiple people familiar with the matter. Maymont, a division of Brookfield Properties, manages a portfolio of single-family homes for rent.
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Divvy and Maymont did not respond to requests for comment.
With the U.S. housing supply at record lows, Divvy initially courted families who had been pushed out of homeownership, promising them a path to the American Dream and moving it away brand from the predatory history of the rent-to-own category. Divvy bought the home of the buyer’s choice and then rented it to him, leaving a portion of his monthly payments for a future down payment. Buyers had three years to buy the house immediately at a predetermined price. “To my family, home ownership was everything,” said co-founder and CEO Adena Hefets.
In the four years since its founding in 2017, the San Francisco-based startup has raised more than $400 million in venture capital from investors including Andreessen Horowitz and Tiger Global Management, as well as $1 billion in debt. By 2022, Divvy was on track to generate more than $100 million in annual revenue.
But as the company expanded to new cities, customer complaints piled up. In October 2022. Fast company reported that Divvy was failing to address tenant requests for repairs, charging more rent than its fellow landlords and evicting landlords in greater numbers than before. Even some buyers who successfully bought their homes from Divvy said they were unhappy with the process and its costs.
At the same time, the Federal Reserve was raising interest rates, dealing a blow to Divvy’s business model. Hefets once suggested that Divvy’s model would insulate it from such macroeconomic fluctuations. But by the end of 2023, Divvy had completed three rounds of layoffs, putting it on par with other struggling proptech startups.
In March 2024, Divvy announced a new product, DivvyUp, a subscription-based home ownership readiness program. CEO Adena Hefets hasn’t posted on LinkedIn since announcing the launch of DivvyUp.
This post originally appeared on fastcompany.com
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