Divvy Sells Portfolio for $1B in Real Estate Shake-Up
Deal News | Jan 31, 2025 | Aim Group
Struggling rent-to-own startup Divvy Homes has sold its portfolio of homes and platform to Brookfield's private real estate fund for $1 billion. This sale, expected to close in February, represents a valuation decline of 50% from its $2 billion valuation in August 2021. The homes will be managed by Brookfield subsidiary Maymont Homes, which has pledged to honor existing rent-to-own contracts. Despite selling its main assets, Divvy aims to continue evolving with a focus on customer satisfaction. Founded in 2017, Divvy raised $1.2 billion in debt and equity, including backing from prominent investors like Andreessen Horowitz and Tiger Global Management. Rising mortgage rates and sector challenges led to Divvy's decline, amid complaints about home repairs, rent practices, and tenant evictions. The announcement raises questions on Divvy's path forward, with no updates on its new DivvyUp home readiness program since its March 2024 introduction.
Sectors
- Real Estate
- Private Equity
- Residential Property Management
Geography
- United States – Divvy Homes is based in San Francisco, CA, and Maymont Homes operates in Charleston, SC, reflecting U.S. geography.
Industry
- Real Estate – The article centers on a transaction involving a portfolio of homes, indicating activity in the real estate sector.
- Private Equity – Brookfield, a private real estate fund, is involved, highlighting private equity's role in acquiring Divvy's assets.
- Residential Property Management – The management of the acquired homes by Maymont Homes falls under this classification.
Financials
- $1 billion – The sale price of Divvy's portfolio to Brookfield.
- $2 billion – Divvy's previous valuation in August 2021.
- $1.2 billion – Total amount raised by Divvy in debt and equity financing.
- $750 million – A round of debt financing raised by Divvy in October 2021.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Divvy Homes | Target Company | Company | A rent-to-own startup struggling in the residential real estate sector. |
| Brookfield | Bidding Company | Company | A private real estate fund acquiring Divvy's portfolio for $1 billion. |
| Maymont Homes | Property Manager | Company | A subsidiary of Brookfield managing the acquired homes. |
| Adena Hefet | CEO | Person | CEO of Divvy Homes. |
| Andreessen Horowitz | Investor | Company | One of Divvy's notable backers in debt and equity financing. |
| Tiger Global Management | Investor | Company | Another prominent investor in Divvy's financial history. |