Divvy Homes Acquired by Brookfield for $1 Billion

Divvy Homes Acquisition by Brookfield Properties

Following a period of instability within the real estate sector, Divvy Homes has announced its acquisition by a division of Brookfield Properties. The transaction is valued at approximately $1 billion.

This outcome differs from earlier reports suggesting a forced sale. However, the final valuation is lower than the $2.3 billion Divvy commanded in 2021. Completion of the deal is anticipated by mid-February.

Divvy’s Rent-to-Own Business Model

Divvy Homes specialized in a rent-to-own program. This allowed prospective homeowners to lease a property for three years while simultaneously building the financial resources necessary for eventual ownership.

The company encountered challenges as mortgage interest rates increased significantly in 2022. This led to multiple rounds of workforce reductions throughout the year.

Funding and Investors

Established in 2016, Divvy Homes secured over $700 million in funding through both debt and equity financing. Notable investors included Tiger Global Management, GGV Capital, and Andreessen Horowitz (a16z).

The company’s most recent funding round was a $200 million Series D in August 2021, spearheaded by Tiger Global Management and Caffeinated Capital. This followed a $110 million Series C round just six months prior.

Brookfield Properties and Future Outlook

Maymont Homes, the Brookfield Properties entity responsible for the acquisition, currently operates in more than 40 U.S. markets.

According to a statement released by Divvy, the company has successfully facilitated homeownership for 2,000 individuals to date.

Note: Recent information indicates that some Divvy shareholders may not receive proceeds from the acquisition, as detailed in a letter from CEO and co-founder Adena Hefets.

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