Divvy Homes is being acquired in a fire sale by Charleston, South Carolina-based Maymont Homes, according to multiple people familiar with the matter. Maymont, a division of Brookfield Properties, manages a portfolio of single-family rental properties.
Divvy and Maymont did not respond to requests for comment.
With U.S. housing supply at record highs, Divvy initially appealed to families transitioning out of homeownership, promising them a path to the American Dream and distancing its brand from the rental category’s predatory history. Divvy bought a home of the customer’s choosing and then leased it back, setting aside a portion of their monthly payments for a future down payment. Customers had three years to buy the house at a predetermined price. “For my family, home ownership was everything,” said co-founder and CEO Adena Hefets.
In the four years since its founding in 2017, the San Francisco-based startup has raised more than $400 million in venture capital, as well as $1 billion in debt, from investors including Andreessen Horowitz and Tiger Global Management. By 2022, Divvy was on track to generate more than $100 million in annual revenue.
But as the company expanded into new cities, customer complaints piled up. In October 2022 Fast Company It reported that Divvy was not addressing repairs requested by residents, was charging higher rents than its landlord peers, and was evicting more tenants than before. Even some customers who have successfully purchased their homes from Divvy have expressed dissatisfaction with the process and its costs.
At the same time, the Federal Reserve was raising interest rates, undermining Divvy’s business model. Hefetz once suggested that Divvy’s model would insulate it from such macroeconomic fluctuations. But by late 2023, Divvy had fired three rounds, putting it in league with other struggling proptech startups.
In March 2024, Divvy announced a new product called DivvyUp, a subscription-based home ownership preparation program. CEO Adena Hefets has not shared any information on LinkedIn since announcing the launch of DivvyUp.