Divvy Homes, a US-based rent-to-buy-property service backed by homebuilder Lennar, secured $200m in series D funding on Friday that lifted the company’s valuation to about $2bn.
Investment firm Tiger Global Management and venture capital firm Caffeinated Capital co-led the round, which included Andreessen Horowitz, GGV Capital, GIC and Moore Specialty Credit.
Incubated by financial technology-focused startup studio HVF Labs in 2017, Divvy buys homes on behalf of approved customers and charges them up to 2% of the property cost as monthly rent that will go towards their down payment.
The company intends to use the money to expand its business, form new partnerships and conduct strategic acquisitions. Landis, which pursues a similar business model, closed a $165m series A round last month.
Tiger Global Management had led a $110m series C round for the company in February 2021, investing alongside GGV Capital, Jaws Ventures, Moore Specialty Credit and unspecified existing backers to take its equity and debt financing past $500m.
Lennar Ventures, an investment vehicle for Lennar, joined GIC to co-lead Divvy’s $34m series B round in 2019, which also featured Andreessen Horowitz, Caffeinated Capital and Max Levchin.
Andreessen Horowitz had led a $30m series A equity and debt round for Divvy the previous year, with contributions from Caffeinated Capital, DFJ and Levchin. The last three had provided $7m in seed funding a few months before.
Adena Hefets, Divvy’s co-founder and CEO, said: “US 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.
“We are 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.”
