Brookfield’s Acquisition of Divvy Homes Signals Accelerating M&A Activity in Real Estate Tech
A $1 Billion Deal Reflects Growing Consolidation Trends in 2025
Divvy Homes / CEO and co-founder Adena Hefets
After a turbulent few years for real estate tech companies, Brookfield Properties announced its acquisition of rent-to-own platform Divvy Homes for approximately $1 billion. While the valuation is notably lower than Divvy’s last publicly reported valuation of $2.3 billion in 2021, the deal reflects a broader trend shaping the real estate technology landscape: increased mergers and acquisitions (M&A) activity.
Market Inflection For Divvy Homes
Divvy Homes launched in 2016 with a mission to help renters become homeowners, purchasing homes on behalf of tenants and leasing them back while they built savings. The company raised over $700 million in debt and equity from high-profile investors, including Andreessen Horowitz (a16z), Tiger Global, and GGV Capital.
At its peak in 2021, Divvy was valued at $2.3 billion, fueled by investor enthusiasm for alternative home financing models. However, the sharp rise in mortgage rates starting in 2022 upended Divvy’s business model, forcing the company to conduct three rounds of layoffs and navigate a more challenging financial landscape.
Brookfield’s $1 billion purchase price is a steep drop from Divvy’s previous valuation, and a new report from TechCrunch reveals that some Divvy shareholders may receive nothing from the deal. According to a letter from CEO Adena Hefets, liquidation preferences could result in certain investors walking away empty-handed—a sobering reminder of the risks in venture-backed real estate tech.
Consolidation: A Defining Trend for 2025
The acquisition of Divvy Homes highlights a key theme for 2025: M&A as a strategic imperative for survival and growth. As market conditions remain challenging, even well-funded startups are opting for exits to larger, resource-rich companies rather than continuing to navigate volatile markets independently.
This consolidation wave is being driven by several factors:
Market Uncertainty: Rising interest rates and slowing real estate transactions have made growth harder to achieve organically, prompting startups to seek partnerships or acquisitions.
Pressure on Valuations: Many proptech firms are accepting lower valuations, as seen in Divvy’s case, to ensure long-term sustainability under larger entities.
Strategic Expansion by Giants: For companies like Brookfield, acquiring innovative startups like Divvy allows them to expand their service offerings and gain an edge in a competitive real estate market.
Divvy’s acquisition is not an isolated case. In recent months, we’ve seen notable deals such as Procore’s acquisition of LienWaivers.io and Zillow’s partnership with ShowingTime, signaling that major players are increasingly turning to M&A as a strategy to integrate advanced solutions into their portfolios.
What Does This Mean for Proptech?
The Brookfield-Divvy acquisition highlights both the opportunities and risks in today’s proptech market. For startups, M&A is increasingly becoming a path to sustainability, but for investors, it raises concerns about liquidation preferences and potential losses when exits don’t meet expectations.
For Brookfield, acquiring Divvy Homes expands its real estate footprint, leveraging an existing rent-to-own model within its broader property management strategy. For proptech founders and investors, this deal serves as a cautionary tale—even well-funded startups can face turbulent outcomes if the macroeconomic environment shifts.
As 2025 unfolds, expect more strategic acquisitions as real estate technology firms navigate an evolving market. While M&A offers stability, it also signals a maturing sector where only the most adaptable companies will thrive.
