Rent-to-own startup Divvy Homes is being sold to Brookfield for nearly $1 billion

After a turbulent few years for companies operating in the real estate market, Divvy Homes announced on tuesday acquisition by its Brookfield Properties division for about $1 billion.

The result isn’t a fire sale as previously described in other reports, though it’s less than the $2.3 billion Divvy was publicly valued at in 2021. The deal is expected to close in mid-February.

Divvy ran a model where it works with renters who want to become homeowners by buying the home they want and renting it back for three years while they build up “the savings needed to own it.” .

The company hit some hiccups in 2022 when mortgage rates started to rise. three known rounds of cuts within a year.

Founded in 2016, the once buzzed-about startup has raised more than $700 million in debt and equity from high-profile investors like Tiger Global Management, GGV Capital and Andreessen Horowitz (a16z). Divvy’s last known funding round was in August 2021. $200 million in Series D funding It was valued at $2 billion by Tiger Global Management and Caffeinated Capital. A Series D round was announced just six months later $110 million Series C.

Maymont Homes, the Brookfield unit that bought Divvy, operates in more than 40 markets in the United States. In a written statement, Divvy said it has “created 2,000 hosts to date.”

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