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This week we’re wanting on the story behind the sale of Divvy Houses, Ramp’s new product, some notable fundraising offers, and extra!
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The massive story
Final week, actual property fintech Divvy Houses introduced that it was promoting to Brookfield Properties for “a total consideration” of about $1 billion. At its peak in 2021, the rent-to-own startup was valued at over $2 billion. On the floor, the result didn’t appear horrible, given the variety of proptech firms which have shut down (most not too long ago, EasyKnock) altogether in recent times.
Nevertheless, digging deeper, we realized that the deal wasn’t actually so rosy for a lot of shareholders. As a result of Divvy had taken out a lot debt, together with a $735 million debt financing in October of 2021, most of that $1 billion was going towards paying that again in addition to funding transaction prices and “liquidation preference to preferred shareholders.” CEO and co-founder Adena Hefets said in a letter to stakeholders considered by TechCrunch that “common shareholders nor holders of the Series FF preferred stock” wouldn’t obtain any consideration. Ouch.
Little question Divvy was damage by rates of interest surging in 2022, but it surely had different issues too. There have been a wide range of complaints alleging that the corporate was not sustaining its properties and/or was evicting individuals whereas additionally charging higher-than-market charge rents. Was it a hearth sale or not? Guess that will depend on who you ask. However even Hefets herself admitted she was “not proud of the financial outcome.”
{Dollars} and cents
Regardless of the current turbulence within the area, some proptechs are nonetheless getting money. Based by a Higher.com alum, Lobby — a platform that helps shoppers save for down funds, primarily performing as a “401(k) for homeownership” — introduced a $6.2 million seed spherical led by Alpaca VC and Hometeam Ventures.
Indian fintech Jar has turned cash-flow constructive, an govt on the Tiger World-backed startup confirmed on January 22. The 3-year-old startup, which presents financial savings and funding providers to shoppers, achieved the milestone whereas nonetheless rising by greater than 10 instances final yr, based on an investor notice seen by TechCrunch’s Manish Singh.
On January 22, Ramp introduced a brand new treasury product that may give its prospects a approach to earn extra on working money. I talked to CEO and co-founder Eric Glyman to get all the main points. After I requested him if it was correct to say Ramp was encroaching on digital financial institution territory with the brand new product, he acknowledged that was a “fair” evaluation.
After pivoting from crypto to payroll, Rollfi is being acquired by Precedence Tech Ventures, a unit of the publicly traded funds and banking tech supplier Precedence Expertise Holdings, for an undisclosed quantity.
Vertice, a London-based startup that operates an AI-powered SaaS spend platform, raised $50 million at a reported $500 million valuation. Ingrid Owen offers us the news.
Visa has joined African fintech Moniepoint as a brand new investor. Sources near the deal advised Tage Kene-Okafor that the fintech — which introduced a $110 million funding final October — acquired over $10 million from Visa.
Austin-based Methodology, a platform that powers debt and debt-repayment options in fintech purposes for firms resembling SoFi, raised a $41.5 million Sequence B spherical led by Emergence Capital.
What else we’re writing
Fintech big Stripe is shedding 300 individuals, based on a leaked memo reported on January 21 by Business Insider, however nonetheless plans to rent in 2025.
Indonesia’s antitrust company KPPU fined Google 202.5 billion Rupiahs, equal to $12.6 million, on January 22 for an antitrust violation associated to its fee system providers for the Google Play Retailer.
There’s an attention-grabbing connection between Mistral, the French AI startup with a $6 billion valuation, and Alan, a medical health insurance unicorn. Romain Dillet offers us the main points.
Extra startups shut down in 2024 than the yr prior, based on a number of sources, and that’s not likely a shock contemplating the insane variety of firms that have been funded in 2020 and 2021. It seems we’re not almost performed, and 2025 could possibly be one other brutal yr of startups shutting down. Learn my deep dive, which incorporates knowledge from Carta and AngelList.
Excessive-interest headlines
Payroll platform Deel denies fees that it enabled cash laundering, blames competitor for lawsuit
HSBC shuts funds app Zing a yr after launch
Andreessen Horowitz closes UK workplace, pivots again to US crypto market
Clutch secures $65M Sequence B funding to propel credit score unions into the fintech period
Thanks for studying! Till subsequent week … comply with me on X @bayareawriter for breaking fintech information, posts about espresso, and extra.
