This Startup Is Promoting For $1B, So Why Is Its Founder Not Happy With The End Result?

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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 large story

Divvy Homes CEO and co-founder Adena Hefets — **Picture Credit:**Divvy Houses / CEO and co-founder Adena Hefets

Final week, actual property fintech Divvy Houses introduced that it was selling to Brookfield Properties for “a complete 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 end result didn’t appear horrible, given the variety of proptech firms which have shut down (most not too long ago, EasyKnock) altogether lately.

Nonetheless, digging deeper, we realized that the deal wasn’t really 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 desire 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 Collection FF most popular inventory” wouldn’t obtain any consideration. Ouch.

Little question Divvy was harm by rates of interest surging in 2022, nevertheless it 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 people whereas additionally charging higher-than-market charge rents. Was it a hearth sale or not? Guess that relies on who you ask. However even Hefets herself admitted she was “not happy with the monetary consequence.”

{Dollars} and cents

misbah nishchay jar tiger global This startup is promoting for $1B, so why is its founder not happy with the end result? — **Picture Credit:**Jar

Regardless of the current turbulence within the house, some proptechs are nonetheless getting money. Based by a Higher.com alum, Lobby — a platform that helps customers save for down funds, primarily performing as a “401(ok) for homeownership” — introduced a $6.2 million seed round led by Alpaca VC and Hometeam Ventures.

Indian fintech Jar has turned cash-flow positive, an govt on the Tiger International-backed startup confirmed on January 22. The 3-year-old startup, which gives financial savings and funding companies to customers, achieved the milestone whereas nonetheless rising by greater than 10 occasions final 12 months, in accordance with an investor word seen by TechCrunch’s Manish Singh.

On January 22, Ramp introduced a new treasury product that will give its clients a technique to earn extra on working money. I talked to CEO and co-founder Eric Glyman to get all the main points. Once 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 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 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 announced a $110 million investment final October — received over $10 million from Visa.

Austin-based Methodology, a platform that powers debt and debt-repayment options in fintech functions for firms reminiscent of SoFi, raised a $41.5 million Series B round led by Emergence Capital.

What else we’re writing

The Stripe Inc. headquarters in South San Francisco. — **Picture Credit:**David Paul Morris / Bloomberg / Getty Pictures

Fintech large Stripe is laying off 300 people, in accordance with 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 cost system companies 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 gives us the details.

Extra startups shut down in 2024 than the 12 months prior, in accordance with a number of sources, and that’s probably not a shock contemplating the insane variety of firms that had been funded in 2020 and 2021. It seems we’re not almost carried out, and 2025 might be one other brutal 12 months of startups shutting down. Learn my deep dive, which incorporates information from Carta and AngelList.