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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 complete consideration” of about $1 billion. At its top in 2021, the rent-to-own startup was valued at over $2 billion. On the floor, the end result didn’t appear horrible, given the variety of proptech corporations 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 choice to most popular shareholders.” CEO and co-founder Adena Hefets acknowledged in a letter to stakeholders considered by TechCrunch that “widespread shareholders nor holders of the Sequence FF most popular inventory” wouldn’t obtain any consideration. Ouch.
Little doubt Divvy was harm by rates of interest surging in 2022, however it had different issues too. There have been quite a lot 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 happy with the monetary end result.”
{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 customers save for down funds, basically appearing as a “401(ok) for homeownership” — introduced a $6.2 million seed spherical led by Alpaca VC and Hometeam Ventures.
Indian fintech Jar has turned cash-flow optimistic, an government on the Tiger International-backed startup confirmed on January 22. The three-year-old startup, which presents financial savings and funding companies to customers, achieved the milestone whereas nonetheless rising by greater than 10 instances final yr, in response to an investor word seen by TechCrunch’s Manish Singh.
On January 22, Ramp introduced a brand new treasury product that will 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 “honest” 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 Know-how 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 inside track.
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 Technique, a platform that powers debt and debt-repayment options in fintech purposes for corporations akin to SoFi, raised a $41.5 million Sequence B spherical led by Emergence Capital.
What else we’re writing
Fintech large Stripe is shedding 300 individuals, in response to a leaked memo reported on January 21 by Enterprise 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 cost system companies for the Google Play Retailer.
There’s an fascinating connection between Mistral, the French AI startup with a $6 billion valuation, and Alan, a medical insurance unicorn. Romain Dillet offers us the main points.
Extra startups shut down in 2024 than the yr prior, in response to a number of sources, and that’s probably not a shock contemplating the insane variety of corporations that had been funded in 2020 and 2021. It seems we’re not almost performed, and 2025 might 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 prices 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.
