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This week we’re trying on the story behind the sale of Divvy Properties, Ramp’s new product, some notable fundraising offers, and extra!
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The large story
Final week, actual property fintech Divvy Properties introduced that it was selling 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 just lately, EasyKnock) altogether lately.
Nevertheless, 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 said in a letter to stakeholders seen by TechCrunch that “widespread shareholders nor holders of the Sequence 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 quite a lot of complaints alleging that the corporate was not sustaining its properties and/or was evicting people whereas additionally charging higher-than-market fee rents. Was it a fireplace sale or not? Guess that relies on who you ask. However even Hefets herself admitted she was “not pleased with the monetary consequence.”
{Dollars} and cents
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 shoppers save for down funds, basically appearing as a “401(okay) 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 government on the Tiger World-backed startup confirmed on January 22. The 3-year-old startup, which provides financial savings and funding companies to shoppers, achieved the milestone whereas nonetheless rising by greater than 10 occasions final 12 months, in line with an investor observe seen by TechCrunch’s Manish Singh.
On January 22, Ramp introduced a new treasury product that might 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 “truthful” 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 news.
Visa has joined African fintech Moniepoint as a brand new investor. Sources near the deal informed 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 purposes for corporations resembling SoFi, raised a $41.5 million Series B round led by Emergence Capital.
What else we’re writing
Fintech big Stripe is laying off 300 people, in line 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 fee 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 gives us the details.
Extra startups shut down in 2024 than the 12 months prior, in line with a number of sources, and that’s probably not a shock contemplating the insane variety of corporations that have been funded in 2020 and 2021. It seems we’re not almost executed, and 2025 might be one other brutal 12 months of startups shutting down. Learn my deep dive, which incorporates information from Carta and AngelList.
Excessive-interest headlines
Payroll platform Deel denies charges that it enabled money laundering, blames competitor for lawsuit
HSBC shuts payments app Zing a year after launch
Andreessen Horowitz closes UK office, pivots back to US crypto market
Clutch secures $65M Series B funding to propel credit unions into the fintech era
Thanks for studying! Till subsequent week … observe me on X @bayareawriter for breaking fintech information, posts about espresso, and extra.
