Fractional home ownership startup Divvy raises $43m series B to build a path from rent to purchase

There is no more important savings asset for most American families than owning a home, but the dream of ownership has turned into a nightmare. Homeownership, which peaked in 2004 at around 70%, hit its nadir after the global financial crisis, reaching 63% in 2016 according to data from the St. Louis Federal Reserve bank.

While the reasons behind the decline are numerous and complicated, one point of friction is the extreme homogeneity of mortgage products available to consumers, which mostly revolves around the government-backed 30-year-fixed mortgage.

Divvy has ambitious hopes to offer consumers an alternative that is more tailored to middle-class Americans who might not have sterling credit, perfectly reliable incomes, or single jobs that are often key aspects of traditional mortgage underwriting.

The company’s product offers a path for homebuyers to transition from renting to ownership over three years. Each month, a part of the rental payment made to Divvy (generally around 25%) is added to a future down payment to buy the home outright. After three years and assuming all payments are made, Divvy’s customers are able to migrate to other mortgage products such as the 30-year-fixed.

Divvy’s model has already attracted the attention of Andreessen Horowitz,

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