'A bloodbath for investors and employee equity': Rent-to-own startup Divvy Homes is being acquired

Rent-to-own startup Divvy Homes, which once promised a revolutionary path to homeownership, is being sold off to Maymont Homes, a division of Brookfield Properties, according to Fast Company. The “fire sale” marks a dramatic fall for the San Francisco-based company, which was previously valued at nearly $2 billion and backed by marquee investors like Andreessen Horowitz and Tiger Global Management.

Divvy Homes launched in 2017 with a mission to help families priced out of traditional homeownership. The company offered a rent-to-own model where customers could select a home, which Divvy would purchase. Customers would then rent the home while contributing a portion of their monthly payments toward a future down payment. With a three-year timeframe to purchase the home at a predetermined price, Divvy positioned itself as a consumer-friendly rent-to-own alternative.

The business started to take off. Over four years, Divvy raised more than $400 million in venture capital, alongside $1 billion in debt financing. By 2022, the company was on track to surpass $100 million in annual revenue.

However, rapid growth brought operational challenges and a surge in customer complaints. When mortgage rates spiked in 2022, the monthly payments required from new Divvy renters became too high and increasingly misaligned with local rent levels, undermining the company’s value proposition. Once touted by Divvy Homes CEO Adena Hefets as resilient to economic swings, Divvy Homes—by late 2023, with a portfolio of around 7,000 homes—had gone through three rounds of layoffs and had pretty much stopped acquiring homes in a bid to stay afloat.

A single-family rental industry insider told ResiClub on Monday that as of last week just about “everyone [at Divvy] has been laid off minus a small team who works on dispositions… [it’s] a bloodbath for investors and employee equity."

The source added that: “the price Divvy paid for the homes three to four years ago plus current interest rates make it impossible for the occupants of the home to be able to afford to buy it from the company. Divvy needed to be able to price a house three years into the future, to set a buyback price for the tenant, that became impossible so they stopped buying homes.”

Neither Divvy Homes nor Maymont Homes—which owns over 10,000 single-family rentals—responded to ResiClub’s media request. It’s unclear how many homes Divvy Homes still owns. While we cannot verify it, a few industry insiders believe Maymont Homes’ purchase is likely an asset acquisition play and could lead to the winding down of Divvy’s rent-to-own business.

Big picture: Divvy Homes' unraveling is part of a larger reckoning within the proptech sector. Amid rising borrowing costs, reduced existing home sales, and declining venture capital funding, several startups have struggled to adapt.

According to an analysis by Fannie Mae, the U.S. housing market would, on paper, return to pre-pandemic 2016–2019 housing affordability levels if one of the following occurred:

1. IF U.S. incomes spiked 60%, we'd return to pre-pandemic housing affordability levels

2. IF U.S. home prices fell 38%, we'd return to pre-pandemic affordability

3. IF mortgage rates fell 4.7 points (from 6.93% to 2.23%), we'd return to pre-pandemic affordability

To be clear, the "IFs" above don't mean that I think these are possible paths. Instead, it's how far Fannie Mae says the given metric on paper would have to shift in order to return housing affordability to 2016-2019 levels.

What this back-of-the-envelope math experiment really shows us is how different the housing affordability picture in 2025 is compared to pre-pandemic 2019.

Big picture: Pre-pandemic housing affordability is very far away.

Housing has a BIG seasonal effect.

We’ve entered the seasonal period during which the number of national new listings increases month-over-month, continuing until it peaks around May.

Note…

New listings = What just came up for sale (that’s what we’re talking about above).

Active listings = Everything still for sale (even if it was listed several weeks ago) and NOT pending. ResiClub uses active listings to give a proxy for the shift in the supply-demand equilibrium.

Over the past week, ResiClub PRO members got these 3 additional research articles:

What to expect from U.S. existing home sales in 2025, as predicted by 16 different forecast models

Monthly report: Housing market inventory dynamics in 800+ metros and 3,000+ counties

What to expect from housing starts in 2025, as predicted by 11 different forecast models