Divvy Homes, a property-technology startup that helps renters to buy homes and become owners, has raised $200 million in a fresh funding round, increasing the company’s valuation to $2 billion.
The fundraising was co-led by Caffeinated Capital and Tiger Global Management with participation from Horowitz, Singapore’s GIC, GGV Capital, Andreessen, and Moore Specialty Credit.
In February of this year, the startup closed a fundraising round at $110 million, which valued the company $490 million. That represents a growth in valuation of more than 400%.
The San Francisco-based company wants to create the right conditions for people to achieve homeownership in the US, which is out of reach to many. Rising house prices and strict lending standards have left many potential homeowners out of luck
Divvy offers a program to help customers with a budget to search for a home, lasting three years with the option to extend for a year. The company collects a deposit equivalent to 1% to 2% of the property’s value after a customer picks a house, and purchases it.
Then the Divvy creates a monthly payment which can be saved toward a down payment on the home. This can help its customers gain approval for a mortgage.
Adena Hefets, Chief Executive Officer & Co-Founder at Divvy Homes said, “A future goal is to launch a 30-year program which gives customers enough time to fully own their homes.”
Founded in 2017 by Adena Hefets, Alex Klarfeld, and Nick Clark, the company has attracted more than 750,000 consumers.
Divvy’s program is available in 16 major US cities including Atlanta, Cincinnati, Houston, Tampa, and Cleveland. Divvy is considering an expansion to more areas such as cities in North and South Carolina as well as Detroit and Las Vegas.
Divvy will use the fresh funding to expand its portfolio from thousands of homes to tens of thousands of homes by spending on hiring, including building out a team that educates real estate agents.
Other existing investors Barry Sternlicht’s Jaws Ventures, homebuilder Lennar Corp., SciFi VC, Affirm CEO Max Levchin, and Home Partners of America also have supported the company up to this point.