![]() ![]() Alex Rampell, a partner at the VC firm, led the $10 million Series A round in Divvy Homes in 2018. The startup last raised a $43 million Series B round in 2019.Įarly on, Divvy Homes attracted the attention of the prominent Silicon Valley venture capital firm Andreessen Horowitz. Divvy Homes recently raised a $110 million Series C round led by Tiger Global Management. It’s usually a couple settling down, they have kids…they’re going through a life event like that.” The Divvy Pathway From Renting to Owningĭivvy’s model of providing customers with a pathway from renting to homeownership has drawn investor attention. “Our customers have, on average, about $4,000 saved up in the bank, about $60,000 to $80,000 in income, and generally have about a 635 FICO score. Image credit: PiqselsĬo-founder and CEO Adena Hefets highlights that the typical customer is a middle-class American who has been locked out of the traditional mortgage system in the current market. “The number of people who fall outside of the traditional mortgage box is growing, with more people struggling to be able to purchase a home,” states Divvy’s CEO Adena Hefets. Divvy’s business model takes advantage of a huge potential opportunity. The average price of the homes it buys is around $200,000. Over the course of 2020, Divvy expanded into 16 total markets. Divvy Income from Rentĭivvy generates revenue through collecting rental income. Millions of Americans are unable to meet the characteristic standards of traditional mortgage underwriting. Securing a mortgage often requires having a strong credit history and a steady income. One hindrance is the homogeneity of the requirements for securing a 30-year fixed mortgage. There are a number of barrier of entries for Americans aspiring to purchase their own home. In the meantime, customers can build equity. The Divvy business model consists of allowing customers to select a house they aspire to eventually own, and then renting it back to them over the course of a couple years. The San Francisco-based startup seeks to make homeownership more attainable for millions of Americans. The homeownership rate is slowly climbing again, but still hovers around 65%. Homeownership rates declined following the global financial crisis, reaching a low point of 63% in 2016. Faced with a soaring housing market, large student loans, and credit card debt, the homeownership rate has declined from its peak of 70% in 2004. And CRB has done just that.For many millennials and middle-class Americans, homeownership has become a distant dream. “Since the PPP program is first come, first serve, we knew we’d need a banking partner who could process lots of loans quickly, without applications getting stuck. “Cross River Bank has been an incredible partner,” said Snow. Read More: Finhabits Launches Microlearning Journeys to Help Diverse Communities Build Healthy Financial Habits For small businesses struggling to keep the lights on or retain employees during the COVID-19 crisis, speed to funding is the top priority. In the first five hours of accepting applications, Divvy processed over $800 million of loan requests. “We’re seeing customers take their applications from start to finish in 15 minutes.”ĭivvy partnered with Cross River Bank due to CRB’s tech-first approach-many other banks have been processing applications on paper. “This is the fastest, easiest solution for PPP applications available, because it all takes place online,” said Sterling Snow, Senior Vice President of Revenue at Divvy. Read More: Kreditech Rebrands to Monedo as It Steps Up Growth in International Lending Markets Divvy, the leader in spend and expense management, announced the immediate availability of its 100%-digital application for SBA-backed Paycheck Protection Program (PPP) loans, through its partnership with Cross River Bank (CRB). ![]()
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