Divvy Seriesann Azevedotechcrunch, which buys and rents homes while setting aside ~25% of monthly payments toward the renter’s future down payment on the house, raises $110M Series C
Divvy has raised a total of $140M in funding since its inception.
When people move to cities like San Francisco or New York, they’re often surprised by how quickly their rent rises and how much they have to spend within months. On the other hand, homeownership may seem like a distant dream; after all, home prices are shooting up in those cities as well. This is where Divvy comes in. The startup buys and rents out homes while setting aside ~25% of your monthly rent payment toward your future down payment on the house. In the meantime, you pay rent to Divvy (which comes with all of the expected utilities and property taxes) and can live in your home for as long as you like. Once you’ve saved enough for a down payment, you buy back the home, at which point Divvy takes its rental fee and moves on to another homeowner.
Divvy is led by serial entrepreneur Jonathan Eppers (CEO) and Brennon Williams (COO), both of whom have worked together in the past at companies including Uber and Redfin. The company recently raised $110M in Series C funding led by Redpoint Ventures — bringing the total amount raised to $140M.
“This investment is the first of many that we’ll be making over the next few years to continue to grow our business and help thousands of Bay Area renters become homeowners,” said Jonathan Eppers, CEO. “We want to create an environment in which people are empowered to strengthen their families and communities by owning their places of residence, and we believe we’re right at the beginning of this shift.”
Divvy is one of few rental companies that provides 100% financing for its rentals. Because the company’s eventual goal is to give homeowners the option of buying their homes back at a discounted price, Divvy can afford to be more flexible with its terms. However, unlike Divvy, most of these other financing companies don’t set aside some rent payments toward the future down payment on your home. That’s in addition to the fact that most of these companies don’t provide 100% financing.
“We want to create an environment in which people are empowered to strengthen their families and communities by owning their places of residence, and we believe we’re right at the beginning of this shift,” said Brennon Williams, chief operating officer at Divvy. “We look forward to helping our 100,000 renters become homeowners in San Francisco and New York over time. This financing will help us achieve this vision with speed and efficiency.”
Divvy has made a name for itself as one of the most innovative companies in the rapidly growing “collaborative consumption” industry. The company is headquartered in San Francisco and operates across New York City. Together, these two markets account for nearly 500,000 homes that Divvy could potentially purchase and rent out to customers.
“The rental market is significantly underserved,” said David Pakman, Partner at Redpoint Ventures. “At Redpoint, we believe that the traditional financing model for housing is broken and that Divvy’s approach will provide a sustainable long-term alternative to the more traditional model.”
With this new funding, Divvy Seriesann Azevedotechcrunch plans to expand rapidly. “We are seeing tremendous growth in both demand and supply in San Francisco and New York,” said Eppers. “We are exploring strategic expansion opportunities in both markets, looking to open additional offices, develop our technology and further improve our customer service.”
In the last quarter of 2016, Divvy opened eight new sites, adding approximately 2,200 homes to the company’s inventory. It currently has more than 4,500 homes listed with more than 1,000 on the market (and 30 new listings per day). In San Francisco alone – the company’s largest market – there are over 3 million people commuting into the city by car.