News Summary

Divvy Homes, a San Francisco-based rent-to-own startup, has been acquired by Brookfield Properties for $1 billion, a significant reduction from its 2021 valuation of $2.3 billion. Despite the substantial acquisition price, many shareholders, including common and Series FF preferred stockholders, are expected to receive no payout. This outcome is primarily due to Divvy’s need to repay outstanding debts, transaction costs, and preferred shareholder liquidation preferences. Founded in 2016, Divvy Homes had raised over $700 million from investors like Tiger Global Management and Andreessen Horowitz. The company faced challenges due to rising mortgage interest rates, leading to multiple layoffs and a decision to sell the company. Divvy’s rent-to-own model, which aimed to help renters become homeowners, struggled under difficult market conditions. CEO and co-founder Adena Hefets expressed disappointment in the financial outcome but took pride in the company’s impact on customers.