Divvy Homes raises $110 million
Divvy Homes has just reported a $110 million Series C round of funding led by Tiger Global Management, GGV Capital, Moore Specialty Credit, and JAWS Ventures. This round of funding brings Divvy’s total debt and equity raised to over $500 million since launching in 2017.
On a mission to make homeownership accessible to everyone, Divvy has developed a bridge between renting a location and purchasing a home. The company purchases homes on behalf of the future owners and then rents it back to them, with part of the rent being used as a future down payment for purchasing the home from Divvy.
Divvy is available in multiple cities including Atlanta, Cincinnati, Cleveland, Dallas, Denver, Miami, Houston, Minneapolis, and Phoenix, and in 2020 they financed 5x as many homes compared to pre-pandemic times.
“At the start of the pandemic, we made a commitment to help and support as many future homeowners as possible,” said Adena Hefets, co-founder and CEO of Divvy Homes. “During COVID-19, new mortgages became difficult to secure as banks tightened underwriting requirements for approvals. As a result, families were locked out of homeownership opportunities during a global pandemic—a time when they needed safety and shelter most. Divvy stepped up in place of traditional financing.”
Since Divvy owns the home, the company requests 1-2% of a down payment as they assume responsibility for managing inspections, closing costs, property taxes, and homeowner’s insurance. For consumers, 25% of their monthly payments contribute to saving for a future down payment as they accumulate enough funds to apply for a traditional mortgage. According to Divvy Homes, on average a customer becomes mortgage eligible in three years.
“Divvy has created a new category of homeownership that addresses the changing American household, providing a safe way to save and build wealth for those who cannot access a traditional mortgage,” says Alex Rampell of Andreessen Horowitz. “Teachers, nurses, and others who are the backbones of our communities are among the groups who benefit the most from the Divvy model, and it’s been inspiring to watch Divvy set so many on a path to homeownership that works for them.”