Brookfield Properties Acquiring Startup Divvy Homes

Divvy Homes, once a high-flying rent-to-home startup, is in the process of being sold to a competitor.

Maymont Homes, the build-to-rent arm of Brookfield Properties, is acquiring Divvy, Fast Company reported. Details of the transaction weren’t disclosed and the concerned parties failed to comment on the matter.

It’s been a tumultuous eight years for the San Francisco-based startup, which was founded in 2017. Just a few years ago, the valuation of the Adena Hefets-led company was sky-high, but renter complaints and a difficult housing climate saddled Divvy with a difficult future.

As of 2021, the startup owned 7,000 homes across 19 markets, a portfolio valued above $1.7 billion. The company bought homes for customers and rented back to them while setting aside parts of monthly payments for a future down payment; customers had three years to purchase their home from Divvy.

Investors included Andreessen Horowitz, Tiger Global Management and Caffeinated Capital. A $200 million funding round in August 2021 brought the company to a $2 billion valuation.

But the housing downturn in recent years wreaked havoc on the business. In the fall of 2022, the company cut 12 percent of its staff. Months later, there was another round of cuts. In September 2023, another 95 employees were cut, leaving a skeleton staff estimated to consist of fewer than 100 employees.

The company also faced customer dissatisfaction, with some airing concerns to The New York Times about inadequate repairs and a rising threats of eviction. Divvy claimed evictions were a last resort for the company, which had a rate of eventual homeownership of less than 50 percent, though still seemingly an improvement over competitors.

In March, Divvy launched a subscription-based homeownership readiness program. It’s unclear what parts of the business, if any, will stay intact as Maymont Homes takes control.

— Holden Walter-Warner