After a turbulent few years for companies operating in the real estate market, Divvy Homes announced Wednesday that it is getting acquired by a division of Brookfield Properties for about $1 billion.
The outcome is not a fire sale as previously described in other reports, although it is less than the $2.3 billion that Divvy was last publicly valued at in 2021. The deal is expected to close in mid-February.
Divvy operated a rent-to-own model in which it worked with renters who wanted to become homeowners by buying the home they wanted and renting it back to them for three years while they built “the savings needed to own it themselves,” it said.
The company ran into some hiccups when mortgage interest rates began to surge in 2022, conducting three known rounds of layoffs in a year’s time.
Founded in 2016, the once-buzzy startup had raised more than $700 million in debt and equity from well-known investors such as Tiger Global Management, GGV Capital, and Andreessen Horowitz (a16z), among others. Divvy’s last known funding occurred in August 2021 — a $200 million Series D funding led by Tiger Global Management and Caffeinated Capital at a $2 billion valuation. The Series D round was announced just six months after a $110 million Series C.
Maymont Homes, the Brookfield unit that is buying Divvy, operates in over 40 markets across the United States. In a written statement, Divvy said it has “created 2,000 homeowners to date.”
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