Divvy Homes has raised a $110 million venture round led by Tiger Global Management, TechCrunch first reported. The startup aims to help more people buy houses by renting back to them while they build equity.
- How it works: Customers pick out a home and Divvy purchases it on their behalf with the renter contributing an initial 1-2% of the home value. They move in at closing, and pay a monthly amount.
- Monthly payment breakdown: Part of the monthly amount is a “market-rate” rent and about 25% goes toward building up savings in the house The renters can choose to cash out their equity or purchase the home before the three years are up.
- Other backers include: a16z, Caffeinated Capital, GGV Capital, GIC, JAWS Ventures, Lennar, Moore Specialty Credit, and SciFi VC.
- Heard in the Valley: Co-founder and CEO Adena Hefets: “During COVID-19, new mortgages became difficult to secure as banks tightened underwriting requirements for approvals. As a result, families were locked out of homeownership opportunities during a global pandemic—a time when they needed safety and shelter most. Divvy stepped up in place of traditional financing.” [TechCrunch+PR]