Valued at $2 billion in 2021 Sequence D funding spherical, rent-to-own firm Divvy Houses had endured a number of rounds of layoffs earlier than launching a subscription-based credit score constructing service final yr.
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Struggling rent-to-own firm Divvy Houses is reportedly set to be acquired by Brookfield Properties’ single-family rental division, Brookfield Maymont Houses.
Neither Divvy Houses, Maymont Houses or Brookfield Properties responded to requests for touch upon information {that a} sale is within the works. Quick Firm reported Friday that Divvy Houses was being acquired “in a fire sale,” citing a number of nameless sources.
A commerce identify of BSFR Property Administration LLC, Charleston, South Carolina-based Maymont Houses acquires, renovates and manages greater than 10,000 single-family rental houses throughout the Southeast and Midwest.
Maymont Houses CEO David Todd can also be a managing director in Brookfield Asset Administration’s actual property group. Earlier than becoming a member of Brookfield in 2017 Todd was an govt at PGIM Actual Property.
On Monday, Divvy’s web site continued to facilitate dwelling searches in 19 markets in 9 states: Arizona, Colorado, Florida, Georgia, Minnesota, Missouri, Ohio, Tennessee and Texas.
Information of a pending deal was first reported by Quick Firm’s Ainsley Harris. In an October, 2022 investigative piece, Harris reported that Divvy was one of many high 10 web acquirers of single-family houses within the U.S. and “arguably more insulated than its Silicon Valley peers from the ups and downs of the housing market for a simple reason: Its business model does not rely on homeownership as an outcome.”
However after analyzing rents marketed by Divvy on 18,000 properties in 19 markets, Harris concluded the corporate was charging greater rents than different landlords in some markets.
In an Aug. 1, 2023 article, the New York Instances reported that Divvy owned 7,000 houses, and that “more renters are struggling to pay, forcing Divvy to file more eviction notices.”
Divvy instructed the New York Instances that it evicts purchasers solely as a final resort, and that not all eviction notices end in accomplished evictions.
Adena Hefets
“With mortgage rates at all-time highs, our mission is more critical than ever,” Divvy co-founder and CEO Adena Hefets instructed the New York Instances in a press release on the time. “Divvy gives renters the power of ownership: Pick out a home, build savings, and have the option to make it your forever home.”
Based in 2017, Divvy raised $30 million in a 2018 Sequence A funding spherical, adopted by a $43 million collection B in 2019 and a $110 million Sequence C in 2021. Through the years, backers included Andreessen Horowitz, Tiger World Administration, Caffeinated Capital and homebuilder Lennar.
However after asserting a $200 million Sequence D funding spherical in the summertime of 2021 that valued the corporate at $2 billion, Divvy confronted housing market headwinds within the kind or rising dwelling costs and mortgage charges.
Divvy laid off 12 % of its workforce of roughly 330 staff within the fall of 2022, and adopted by means of with a second spherical of layoffs in February 2023. In September 2023, Divvy handed out pink slips to 95 staff in 21 states, together with various senior managers on the firm’s San Francisco headquarters.
Final yr, Divvy Houses launched a “home readiness product,” DivvyUp, which goals to assist would-be homebuyers who pay a subscription payment of $14.95 a month to spice up their credit score scores, slash debt, and save as much as purchase a house.
Sale-leaseback platform EasyKnock, which confronted shopper lawsuits and enforcement actions by attorneys basic in a number of states, closed its doorways in December after being hit by shopper lawsuits and enforcement actions by attorneys basic in Connecticut, Michigan and Massachusetts.
The Connecticut Lawyer Common’s Workplace alleged the corporate focused “cash-strapped homeowners in need of financing who, for reasons of poor credit or excessive debt, may not qualify for financing.”
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