Divvy Homes Acquired by Maymont Homes

Divvy Homes, once a rapidly growing rent-to-own startup, is being sold to Maymont Homes, the build-to-rent division of Brookfield Properties. While details of the acquisition remain undisclosed, the sale marks a pivotal moment in Divvy’s tumultuous eight-year journey.

A Promising Start and Rapid Growth

Founded in 2017 and led by Adena Hefets, Divvy Homes quickly gained attention with its innovative approach to homeownership. The startup purchased homes and leased them to renters while allocating part of their payments toward a down payment. Customers were given three years to buy the property outright. By 2021, Divvy’s portfolio included 7,000 homes across 19 markets, valued at over $1.7 billion.

Investors such as Andreessen Horowitz, Tiger Global Management, and Caffeinated Capital fueled the company’s rapid rise, culminating in a $2 billion valuation after a $200 million funding round in 2021.

Setbacks from a Shifting Housing Market

Despite its initial success, Divvy struggled as the housing market softened in recent years. Rising costs and economic uncertainty led to widespread difficulties for the company. Staff reductions began in late 2022, cutting 12% of its workforce, followed by additional layoffs in 2023. By September of that year, the staff dwindled to fewer than 100 employees.

Customer Concerns and Operational Challenges

Divvy also faced criticism from renters, some of whom expressed dissatisfaction with the quality of repairs and growing threats of eviction. The company claimed evictions were rare and a last resort, but its homeownership success rate remained below 50%.

In March 2023, Divvy introduced a subscription-based program aimed at preparing renters for homeownership. However, the effectiveness and future of this initiative under Maymont Homes remain uncertain.

A New Chapter with Maymont Homes

With its acquisition by Maymont Homes, the fate of Divvy’s operations is unclear. Whether Maymont will retain any of Divvy’s programs or pivot entirely remains to be seen. The sale underscores the challenges faced by startups navigating the complexities of the housing market.