The news follows Divvy’s $ 200 million Series D and will see it serve more Americans on the road to homeownership through a lease-to-buy program.
Lease-hire tech startup Divvy Homes has provided a total of $ 735 million in new debt financing, the company announced Tuesday.
The news follows Divvy’s $ 200 million Series D, acquired just two months ago in August, and will see it serve more Americans on their journey to homeownership through its program. lease with a three-year purchase option, the company said. As of Series D, Divvy was valued at $ 2 billion. The company did not immediately respond to requests for a valuation update.
Specifically, the new funds will be used to refinance two of the company’s existing credit facilities so that it can buy more homes and serve more customers. Divvy’s 10-year goal is to help more than 100,000 families become homeowners.
The business buys a home on behalf of its customers, who then contribute 1-2% of the home’s value as a down payment when renting the home. Rent payments are structured so that clients will have saved up for a 10% down payment on the house after three years, after which they can either buy the house or take their savings away.
More than 750,000 Americans have applied to the Divvy program since its inception in 2017, according to a press release.
The company cited Barclays, Goldman Sachs, Cross River Bank, LibreMax Capital and Brigade Capital Management as the main lenders enabling Divvy’s growth.
“We are grateful for the support of our lenders to help us make homeownership possible for more Americans,” Adena Hefets, co-founder and CEO of Divvy Homes, said in a statement. “There is no doubt that there is an urgent need to resolve our country’s housing problems.
“Our success is the success of our customers,” added Hefets. “Divvy customers exercised their option to purchase their home at a rate of approximately 47%, well above the conversion rates of our competitors. “
Divvy’s customers end up saving an average of $ 8,200 by renting from the company, which is roughly 10 times the median savings of U.S. renters, according to a 2017 study by the Joint Center for Housing Studies at Harvard University.
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