Lease to own company Divvy Homes cuts 40 people

Divvy Homes slashes 12% of staff as rates continue to climb

The corporate, valued at $2 billion as of August 2021, has diminished its worker rely by 40 folks, the most recent in a run of actual property firms which have enacted layoffs.

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Even unicorns are topic to market fluctuations.

Divvy Houses, valued at $2 billion as of August 2021, has diminished its worker rely by 12 p.c, or 40 folks, in response to the altering housing market, based on Catherine Cuello-Fuente, a communications strategist who as soon as labored for the lease-to-own firm.

Information of the layoffs was additionally reported by The Aim Group.

Inman has not heard again from a request for remark from Divvy. In an announcement to Purpose Group, Kyle Zink, Vice President of promoting and communications cited, “worsening financial situations.”

“Though we acknowledged these macroeconomic challenges in late summer time 2022 and took steps to considerably scale back our value construction in response, it sadly was not sufficient,” Zink stated. “Realistically, the macro atmosphere is more likely to stay unstable and difficult for the foreseeable future. In consequence, we would have liked to regulate headcount to replicate the brand new actuality at the moment.”

Divvy purchases houses on behalf of its prospects after which rents the houses again to them whereas the shoppers proceed to construct fairness on the properties. Initially, the renter contributes 1 to 2 p.c of the house worth to the acquisition, then about 25 p.c of every month-to-month cost that follows goes towards saving up for a down cost.

The settlement between renters and Divvy is organized so {that a} renter can save as much as 10 p.c of the house’s worth over the course of a three-year lease, however may purchase the house at any time. Or if the renter decides towards the house, they will stroll away and obtain money for his or her financial savings.

Divvy rose shortly from the tech hotbed of California’s Bay Space to handle an more and more tough housing marketplace for these unable to completely afford a down cost, but had sufficient monetary wherewithal to sort out the continuing burdens of dwelling possession.

“Initially of the pandemic, we made a dedication to assist and help as many future householders as attainable,” stated Adena Hefets, co-founder and CEO of Divvy Houses, in a February 2021 assertion after securing $110 million in Collection C funding.

The corporate saved amassing funding, nailing down one other $200 million in an August 2021 Collection D spherical. Two months later, Inman reported on one other $735 million in debt financing.

Divvy is the latest of many actual property brokerages and technology-forward, various actual property fashions to handle the market with employees reductions. Compass, Higher, Flyhomes and Homelight are a few of the notables.

That is an ongoing story.

Email Craig Rowe

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