Divvy Homes has raised a $200 million Series D funding led by Tiger Global Management and Caffeinated Capital, with participation from existing investors including Andreessen Horowitz, GGV Capital, GIC and Moore Specialty Credit. The funding reportedly values San Francisco-based Divvy at $2 billion.
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Divvy aims to make homeownership more accessible via a rent-to-own model. Its latest funding comes just six months after it raised a $110 million Series C funding, also led by Tiger Global. The company said it has already closed more home sales this year than it did in total between its founding in 2017 and 2020. That growth, it said, attracted the attention of its lead investors, who it said “preempted the Series D.”
Customers work with Divvy to find a home, and then the company purchases the home on their behalf with the customer contributing about 1 percent to 2 percent of the home’s value. Customers then rent the home, with about 25 percent of the monthly payment going toward a future down payment, the company told Crunchbase News in February.
Clients can build up to 10 percent of the value of the home over the course of their three-year lease, but are also free to buy the home at any point during the lease. If a customer decides not to buy the home, they are able to cash out their savings, the company said. To date, its customers have exercised their option to purchase at a rate of roughly 40 percent, Divvy said this week.
Divvy says it now operates in 16 markets and is expanding its footprint in Georgia, Texas and Florida, and works with about 25,000 real estate agents across the country.
CEO Adena Hefets told Crunchbase News earlier this year that the company also plans to add adjacent homebuying services, such as in-house real estate agents, and title, escrow services and mortgage services. “It just creates a more consistent customer experience to not be using as many third parties and bring a lot of this stuff in house,” she said in that interview.
Divvy’s funding and growth follows a pandemic-fueled homebuying boom across the country that has also pushed up prices. Other startups in the homebuying space that have raised notable venture funding this year include Doorvest, Propertymate and Rendin. Tech-enabled residential real estate brokerage Compass also went public in April.
Marlize van Romburgh and Sophia Kunthara contributed.
Illustration: Dom Guzman
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