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Troubled rent-to-own startup Divvy Homes will be acquired by Maymont Homes, a division of Brookfield Properties that manages single-family rental homes.
Divvy and Maymont have not released any formal statements to announce the acquisition. Fast Company reported the move last week, describing it as a “fire sale” based on multiple unnamed sources.
Maymont Homes, headquartered in South Carolina, manages 10,000 single-family rental properties in its portfolio. Divvy Homes reportedly managed 7,000 homes as of late 2023.
Divvy Homes arrived on scene in 2017 with intentions to give Americans an alternative path to homeownership via a rent-to-own model. The company would purchase a home selected by a customer, who would then rent the home while setting aside a portion of their monthly payment to accumulate a down payment. From there, they would have three years to purchase the home.
This new approach to homeownership launched Divvy into early success. Over a four-year period, the startup received $400 million in venture capital from several investors, including Andreessen Horowitz and Tiger Global Management. Andreessen kicked things off in 2018, leading a $30 million Series A equity and debt round. In 2021, Tiger Global followed, leading a $110 million Series C funding round.
Divvy earned a spot on HousingWire‘s 2018 Tech100 list and on Forbes’ fifth annual Fintech 50 in 2020.
That success was ultimately short lived as complaints started rolling in. According to Fast Company, Divvy failed to address resident repair requests, charged higher rents than competitors and evicted a high number of renters. Fast Company released an investigative piece in October 2022 that highlighted higher-than-average rent prices across 18,000 Divvy properties in several markets.
These issues, combined with rising interest rates, prompted multiple rounds of layoffs at the company. These impacted senior software engineers, senior managers and vice presidents across capital markets, sales and compliance in 20 states.
Despite the layoffs, Divvy Homes continued its growth efforts. The company launched a new homeownership readiness program called DivvyUp in March 2024.
“We spent a lot of time talking to our current customer base and trying to figure out exactly what they needed, and what they wanted to feel more supported from Divvy,” CEO Adena Hefets said in statement about the launch.
