Proptech startup Divvy Homes scored another big round of fundraising, bringing the company’s valuation to $2 billion.
The new round of funding essentially quadrupled the startup’s valuation. The latest round of financing was led by Tiger Global Management and Caffeinated Capital, according to Bloomberg.
Other investors in the round included Andreessen Horowitz, GIC, GGV Capital and Moore Specialty Credit. The San Francisco-based company raised $200 million in equity financing this round.
Divvy was founded in 2017 and has been growing rapidly ever since. In February, the company raised $110 million at a $490 million valuation.
Divvy helps renters become homeowners. The company buys homes on behalf of its customers, who sign three-year leases. Divvy collects a deposit of about 1 to 2 percent of the property’s value and charges monthly rent, some of which can be saved towards a down payment.
The company gains revenue from rental income. When customers’ leases come to an end, they can either cash out or buy the home from Divvy. Some customers even end up saving enough to buy the home from Divvy sooner than the lease expiration.
Divvy counts more than 750,000 customers in 16 major markets, including Atlanta, Houston and Cleveland. Almost 25,000 real estate agents work with the startup, which holds about $850 million in debt. Expansion is in the company’s future plans, with Detroit and Las Vegas among the cities in its sights.
[Bloomberg] — Holden Walter-Warner