In a recent landmark deal, Brookfield Properties’ division is set to acquire Divvy Homes, the company known for its innovative rent-to-own model, at an approximated value of $1 billion. The transaction, which is expected to conclude mid-February, comes as a strategic decision by both entities despite Divvy’s recent struggles and downsized valuation from $2.3 billion in 2021.
Established in 2016, Divvy Homes fortified its business model, essentially aiding renters to become homeowners. The start-up acquires a home as per the renter’s choice and rents it back to them for three years whilst they accumulate the savings necessary for ownership.
However, Divvy faced significant hurdles and downsizing amidst the surge in mortgage interest rates in 2022. The startup had previously raised over $700 million in both debt and equity. Notable investors include Tiger Global Management, Andreessen Horowitz (a16z), and GGV Capital, among others.
The agreement with Maymont Homes, the Brookfield division involved, cements Divvy’s future. The acquisition will see Divvy added to Maymont’s operations, which spans across more than 40 markets in the United States. Over its operational span, Divvy proudly shared that it has aided in creating 2,000 homeowners till date.
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