Valued at $2 billion in 2021 Series D funding round, rent-to-own company Divvy Homes had endured several rounds of layoffs before launching a subscription-based credit building service last year.
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Struggling rent-to-own company Divvy Homes is reportedly set to be acquired by Brookfield Properties’ single-family rental division, Brookfield Maymont Homes.
Neither Divvy Homes, Maymont Homes or Brookfield Properties responded to requests for comment on news that a sale is in the works. Fast Company reported Friday that Divvy Homes was being acquired “in a fire sale,” citing multiple anonymous sources.
A trade name of BSFR Property Management LLC, Charleston, South Carolina-based Maymont Homes acquires, renovates and manages more than 10,000 single-family rental homes across the Southeast and Midwest.
Maymont Homes CEO David Todd is also a managing director in Brookfield Asset Management’s real estate group. Before joining Brookfield in 2017 Todd was an executive at PGIM Real Estate.
On Monday, Divvy’s website continued to facilitate home searches in 19 markets in nine states: Arizona, Colorado, Florida, Georgia, Minnesota, Missouri, Ohio, Tennessee and Texas.
News of a pending deal was first reported by Fast Company’s Ainsley Harris. In an October, 2022 investigative piece, Harris reported that Divvy was one of the top 10 net acquirers of single-family homes in 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.”
But after analyzing rents advertised by Divvy on 18,000 properties in 19 markets, Harris concluded the company was charging higher rents than other landlords in some markets.
In an Aug. 1, 2023 article, the New York Times reported that Divvy owned 7,000 homes, and that “more renters are struggling to pay, forcing Divvy to file more eviction notices.”
Divvy told the New York Times that it evicts clients only as a last resort, and that not all eviction notices result in completed evictions.
Adena Hefets
“With mortgage rates at all-time highs, our mission is more critical than ever,” Divvy co-founder and CEO Adena Hefets told the New York Times in a statement at 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.”
Founded in 2017, Divvy raised $30 million in a 2018 Series A funding round, followed by a $43 million series B in 2019 and a $110 million Series C in 2021. Over the years, backers included Andreessen Horowitz, Tiger Global Management, Caffeinated Capital and homebuilder Lennar.
But after announcing a $200 million Series D funding round in the summer of 2021 that valued the company at $2 billion, Divvy faced housing market headwinds in the form or rising home prices and mortgage rates.
Divvy laid off 12 percent of its workforce of approximately 330 employees in the fall of 2022, and followed through with a second round of layoffs in February 2023. In September 2023, Divvy handed out pink slips to 95 employees in 21 states, including a number of senior managers at the company’s San Francisco headquarters.
Last year, Divvy Homes launched a “home readiness product,” DivvyUp, which aims to help would-be homebuyers who pay a subscription fee of $14.95 a month to boost their credit scores, slash debt, and save up to buy a home.
Sale-leaseback platform EasyKnock, which faced consumer lawsuits and enforcement actions by attorneys general in several states, closed its doors in December after being hit by consumer lawsuits and enforcement actions by attorneys general in Connecticut, Michigan and Massachusetts.
The Connecticut Attorney General’s Office alleged the company targeted “cash-strapped homeowners in need of financing who, for reasons of poor credit or excessive debt, may not qualify for financing.”
Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.
Email Matt Carter
