Fueled by Strong Customer Demand and Market Growth, Divvy Homes Achieves Unicorn Status as Existing Investors Tiger Global and Caffeinated Capital Lead Round
SAN FRANCISCO– August 13, 2021 – Just six months after announcing its Series C, Divvy Homes has completed a $200 million Series D equity financing that further extends Divvy Homes’ position as a market leader in the proptech industry. Divvy Homes’ accelerating growth – with more closed homes in 2021 than cumulative closings since its founding in 2017 – caught the attention of its lead investors, who preempted the Series D and valued Divvy Homes at approximately $2B. Led by Tiger Global Management and Caffeinated Capital, with participation from existing investors including Andreessen Horowitz, GGV Capital, GIC, and Moore Specialty Credit, the round allows Divvy Homes to provide Americans with unprecedented access to the country’s primary wealth-builder: homeownership.
“Over the next 10 years, we believe Divvy Homes has the potential to help more than one hundred thousand families become financially responsible homeowners,” says Scott Shleifer, Partner, Tiger Global. “It’s clear that Divvy Homes is leading the creation of a new category that redefines the way Americans access homeownership. This latest round creates the runway for Divvy Homes to expand its footprint and drive continued growth.”
Over 750,000 Americans have applied to Divvy Homes since 2017, when it was founded with a mission of creating a new path to homeownership through its innovative three-year homeownership program. Customers were immediately drawn to Divvy Homes’ intuitive tech-enabled application, flexible and innovative underwriting, and its customer-centric approach along every step of the home buying process.
Janese Scott, a Divvy Homes success story, describes her experience: “My credit wasn’t the best. I knew I couldn’t purchase a home, but I thought I could get myself into a better situation. In February 2020 I moved into my house with Divvy Homes, and I ended up buying it in June 2020. I’m never going to get rid of this house because it changed my life completely.” Divvy Homes exists to serve customers like Janese, helping Americans like her facilitate homeownership and boost wealth creation in America.
“U.S. homeownership has been at record lows throughout this decade because of rising home prices and stricter underwriting. This trend has only been exacerbated by COVID. More than ever before, Americans are having to put their dreams of homeownership on hold,” said Adena Hefets, co-founder and CEO of Divvy Homes. “We’re the first real estate platform that helps you save for a down payment while you live in your dream home. We are a tech-driven real estate platform, not a rental business. We are a homeownership program, not a landlord.”
Divvy Homes’ Series D is a testament to the rapid growth achieved over the past six months:
- Divvy Homes now operates in 16 markets, with expanding footprints in Georgia, Texas and Florida.
- Cumulative qualified applicants and monthly homes closed have both grown 3x since the Series C.
- Nearly 25,000 real estate agents work with Divvy Homes, more than tripling over the past year.
- To date customers who have completed their lease have exercised their option to purchase their homes at a rate of ~40 percent, well above the conversion rates of our major competitors.
- Divvy Homes’ market share has doubled since the end of 2020.
“Historically, Americans could only choose between renting and owning. Today, Divvy Homes provides a third option that scales homeowner accessibility,” says Raymond Tonsing, Caffeinated Capital. ”Not only has Divvy Homes grown faster than their competition, they also care deeply about the mission. Creating this entirely new category, Divvy Homes is helping turn renters into homeowners.”
Divvy Homes not only enables homeownership, but also encourages financial stability. Its customers often are in a far more stable and positive financial situation than their peers, having built up an average of $8,200 in savings during their time with Divvy Homes. This is ~10x the median savings of renters in America, according to a 2017 study by the Joint Center for Housing Studies of Harvard University. Divvy Homes has already put thousands of families on a path of saving towards and eventually owning their own home.
With the appetite for its product intensifying over this past year, the Company plans to use the Series D equity investment to further market expansion, launch new partnership channels, and efficiently deploy its new capital against ROI positive acquisition channels. With this recent raise, Divvy Homes remains a market leader in the proptech industry, and is on a path to help millions of Americans access homeownership.
How it Works
Divvy Homes uses technology and a human-centric approach to partner with customers at every step of the home buying process, with the goal of helping renters transition into homeowners. Buying a home with Divvy Homes starts with a five-minute application that results in an approved home-buying budget and shopping with a real estate agent.
Once the customer finds their dream home, Divvy Homes purchases the property, while the renter contributes an initial 1-2 percent of the home value towards their down payment savings.
Up to 25% of each subsequent monthly payment goes toward saving for a down payment, setting customers up to apply for a traditional mortgage when they are ready. A customer builds up to 10 percent of the value of the home over their three-year lease, but they can buy the home at any time. If a customer changes their mind, they can walk away from the home and get cashed out for their savings. Divvy Homes provides the flexibility of renting with the freedom and wealth-building power of homeownership.
About Divvy Homes
Divvy Homes is on a mission to make homeownership more accessible to American families. The program is currently available across 16 major U.S. metropolitan areas: Atlanta, GA; Cincinnati, OH; Cleveland, OH; Dallas, TX; Denver, CO; Ft Lauderdale, FL; Houston, TX; Jacksonville, FL; Memphis, TN; Minneapolis, MN; Miami, FL; Orlando, FL; Phoenix, AZ; San Antonio, TX; St. Louis, MO; and Tampa, FL. Divvy Homes is backed by Andreessen Horowitz, Caffeinated Capital, GGV Capital, GIC, JAWS Ventures, Lennar, Moore Specialty Credit, SciFi VC, and Tiger Global Management. Divvy Homes was incubated in Max Levchin’s startup studio HVF, and co-founded by Adena Hefets, Nick Clark and Alex Klarfeld.
Updated on 6/27/2022 to clarify that the customers who have exercised their option to purchase is as a percentage of those who have completed their lease.