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Divvy Seriesann Azevedotechcrunch, Divvy Homes receives $110M in Series C Funding, reports Ann Azevedo on TechCrunch

In a Series C round led by Tiger Global Management, Divvy Homes has secured a $110M investment to help people achieve the American dream, as per Ann Azevedo on TechCrunch.

Key Takes:

  • Divvy Homes secures $110M in Series C funding round led by Tiger Global Management
  • Started in 2017 in San Francisco, taking a digital approach to the traditional rent-to-own model 
  • Divvy Homes helps people buy homes by buying the house and renting it back to the owner 
  • The customer pays monthly rent with a portion going towards saving for a down payment
  • The company has raised over $1.2 billion in 7 funding rounds, with 16 investors

Divvy Homes is helping fuel the American dream by letting people own their houses. What they do is buy the house and rent it back to the owner, as the homeowners build equity. This way, while they are paying “rent” as they would be anyway, they slowly buy the house, thanks to Divvy Homes. [Divvy SeriesAnn AzevedoTechCrunch]

As reported by Ann Azevedo on TechCrunch on February 2nd, 2021, Divvy Homes just bagged a whopping $110 million investment from angel investors. The investment round was led by none other than Tiger Global Management, while other big fish also participated in the round, including JAWS Ventures, a16z, Moore Specialty Credit, GGV Capital, and others.

In its seed round in January 2018, Divvy Homes received $7 million with Caffeinated Capital being the lead investor. Fast forward to October 2021, the company raised $735 million. To date, Divvy Homes has raised over $1.2 billion in a total of seven funding rounds featuring 16 investors, 5 of them are Lead investors of the company. 

As Covid-19 hit and affected the global financial markets, especially the housing market, we saw that mortgage rates were dropping which, on paper, should have allowed more people to buy a house, but we do know that the banks always win. The banks, instead of promoting more people to finally buy a house, were tightening the requirements for approval, as per Divvy Homes. [Divvy SeriesAnn AzevedoTechCrunch]

Divvy Homes co-founder Adena Hefets said that Divvy Homes stopped buying new homes to see how the market would react to Covid-19 and noticed that the world is trying to buy homes more than ever. 

“We actually paused home buying for March and April and just kind of stood still waiting to see what would happen to the world… And when it felt like the world became stable again, we said, ‘Okay, let’s get back out there,’ “ stated Adena Hefets.

“Mortgages were harder to get yet we were seeing this mad rush of people who wanted to move out of multifamily and downtown areas… So while traditional financing dried up, we saw a really good tailwind for our business,” she added. 

“A huge number of people want to become homeowners but just can’t,” said Alex Rampell, an Andreessen Horowitz General Partner.

“So they’re not spending the first nine months after purchasing a home looking for a tenant… they’re not speculating on an empty house and worrying what happens if they buy a home and can’t rent it out,” he added.  [Divvy SeriesAnn AzevedoTechCrunch]

About Divvy Homes

Founded in 2017 in San Francisco, California, Divvy Homes takes a digital approach to the old rent-to-own model. For those who don’t qualify for a cost-effective mortgage or a home loan at all, Divvy Homes buys the home for them and rents it back to them for three years, becoming their landlord.  

The customer moves in and pays a monthly rent, with a portion going towards saving for a down payment. After three years, they can use the saved amount to buy the home from Divvy, or continue renting if they want. This allows the future homeowner to gradually save and eventually purchase the home, thanks to Divvy Homes. [Divvy SeriesAnn AzevedoTechCrunch]

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