PropTech platfom Divvy Homes has raised $7m in its latest funding round led by Caffeinated Capital.
Other participation to the round came from Max Levchin’s startup studio HVF, DFJ and a credit facility.
Divvy is a homeownership platform that enables renters to build credits while they are renting. A home owner chooses a home, Divvy then purchases the house for them and renters will then live in the home building equity credits, paying down debts and building a steady income to be mortgage-ready within three years.
The buyer will provide 2 per cent and then make monthly payments in rent and equity, with the equity building credit. After three years, Divvy offers the renter to buy out the remaining debt on the house through a mortgage, using the credit as a down payment.
Capital from the round will be used to support expansion operations to Cleveland and Atlanta, accelerating growing and building its team.
Affirm CEO Max Levchin said, “Real estate is an industry plagued by manual processes. The technology Divvy is building around application processing, underwriting, and managing these homes will allow Divvy to scale operations and provide better pricing to consumers compared to traditional institutions.”
Late last year, Caffeinated Capital made a couple of investments in to the FinTech space. The firm took part in the $200m Series E round of payment solution provider Affirm, which helps customers to make purchases with loans and then make monthly repayments. Caffeinated Capital also participated in the $22m investment in to data collection company TrueAccord.
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