- Divvy, a platform that creates homeowners by building savings every month, announced recently it raised $43 million in Series B funding
Divvy — a platform that creates homeowners by building savings every month — announced it raised $43 million in Series B funding. This round of funding was provided by GIC (Singapore’s sovereign wealth fund) and Lennar (one of the nation’s leading homebuilders). Existing investors Andreessen Horowitz, Caffeinated Capital, and Max Levchin also joined the round.
Previously, Divvy raised more than $100 million in debt financing. And with this new raise, Divvy’s combined equity and debt capital is nearing $200 million.
“We are forging a new path to homeownership, a life-changing accomplishment currently unavailable to many Americans. Much of early real estate tech stopped at simply digitizing the archaic, data-heavy processes buyers encounter along the way. We take things further, fundamentally changing who has access to the American Dream,” said Adena Hefets, the co-founder and CEO of Divvy. “We are very pleased to welcome the new investors. GIC has been investing in technology and real estate for a very long time and we look forward to tapping their insights.”
Divvy is working to create hundreds of thousands of homeowners in the U.S. and it has already helped customers saved more than $5,000 per household.
“We are confident that Divvy will continue causing meaningful disruption in the real estate space, given its unique business model and real impact on wealth creation in America,” added Alastair (Alex) Rampell of Andreessen Horowitz. “We know this injection of capital will fuel Divvy’s further growth as it already outpaces the industry.”
This round of funding will enable Divvy to expand its team of real estate industry experts, increase investment in technology, and buy more homes to accelerate growth.
“Divvy’s mission to make homeownership more accessible really resonates with us,” explained Eric Feder, a Managing General Partner for Lennar Ventures. “By investing in Divvy, we are accelerating our shared vision of giving more people access to their dream home.”
Founded by Adena Hefets, Nick Clark, and Alex Klarfeld, Divvy believes in the value of homeownership and aims to create a world where every person can own their forever home. And Divvy helps renters build wealth and provide stability for their families giving them the benefits of homeownership and appreciation.
“Proptech is flooded with startups targeting high net-worth individuals, but Divvy’s model addresses the needs of the vast majority of Americans, often ignored by Silicon Valley,” commented Max Levchin, a founder of HVF (where Hefets and co-founder Brian Ma incubated Divvy). “Divvy’s rapid growth is proof that the model works — and more importantly, is creating real wealth. We’re excited to be a part of Divvy’s next chapter and to watch their lead expand.”
Divvy partners with renters on their path to homeownership by buying the home they want and renting it back to them for 3 years while building the savings needed to own it themselves. Plus Divvy helps customers find the home they love and build the good financial habits of owning.
Essentially, Divvy partners with its users every step of the home buying process with the goal of helping renters transition into homeownership. To buy a home with Divvy, it requires a five-minute application that results in an approved home-buying budget and an introduction to a real estate agent who helps find them a forever home. Once it is found, Divvy buys the property while the renter contributes an initial 2% of the home value to officially step onto the path to homeownership.
Approximately 25% of each subsequent rent payment goes toward saving for a traditional mortgage so the new residents have a down payment to buy their home in three years. And if renters change their mind, they can walk away from the home and get cashed out for their savings. Plus if they want to buy it faster, then the homeownership can be accelerated. Currently, Divvy operates in Atlanta, Cleveland, and Memphis. Divvy will expand into new markets in the future.
