Greetings from TechCrunch Fintech!
This week, we’re diving into the details surrounding Divvy Homes’ acquisition, Ramp’s latest offering, significant fundraising initiatives, and much more!
To receive a weekly digest of TechCrunch’s most noteworthy fintech stories straight to your inbox every Tuesday at 8:00 a.m. PT, subscribe here.
The Key Story
Last week, financial technology company Divvy Homes disclosed its agreement to be sold to Brookfield Properties for roughly $1 billion. At its peak in 2021, this rent-to-own firm boasted a valuation exceeding $2 billion. While the result may not appear terrible, considering the number of proptech firms that have completely folded in recent years (most notably, EasyKnock), a closer examination reveals a grimmer narrative for many investors.
The terms of the deal suggest that most of that $1 billion payout will be allocated to settling previously incurred debt, including a significant $735 million debt financing taken on in October 2021, alongside transaction fees and “liquidation preferences for preferred shareholders.” CEO and co-founder Adena Hefets communicated in a letter to stakeholders seen by TechCrunch that neither common shareholders nor the holders of Series FF preferred stock would receive any returns. Ouch.
The interest rate hikes of 2022 certainly impacted Divvy, but the company also faced other challenges. There were numerous complaints claiming the firm failed to maintain its properties and was evicting tenants while demanding above-market rents. Was this a fire sale or not? That may depend on one’s perspective. Nevertheless, even Hefets admitted she was “not proud of the financial outcome.”
Finances in Focus
In spite of the recent ups and downs in the industry, certain proptech companies continue to attract investment. Foyer, created by a former member of Better.com, recently secured $6.2 million in seed funding, led by Alpaca VC and Hometeam Ventures. The platform enables users to save for home down payments, effectively functioning as a “401(k) for homeownership.”
In a notable development in India, fintech startup Jar has reached a cash-flow positive status, as confirmed by an executive from the Tiger Global-supported enterprise on January 22. This three-year-old startup, which provides consumers with savings and investment services, managed this achievement while growing over tenfold last year, according to an investor note obtained by TechCrunch’s Manish Singh.
On January 22, Ramp unveiled a new treasury product aimed at enabling clients to earn increased returns on their operational cash. I spoke with CEO and co-founder Eric Glyman for insights. When asked if it would be fair to say Ramp was broadening its reach into digital banking with this offering, he agreed that such an assessment was indeed “fair.”
Meanwhile, Rollfi, which shifted its focus from crypto to payroll, is being purchased by Priority Tech Ventures, a division of the publicly traded payments technology company Priority Technology Holdings, for an undisclosed figure.
Vertice, a startup in London with an AI-driven SaaS platform for managing expenditures, has raised $50 million, achieving a valuation of approximately $500 million. Ingrid Owen has the latest insights.
Visa has become a new investor in African fintech company Moniepoint. Sources familiar with the transaction informed Tage Kene-Okafor that the fintech, which announced a $110 million round last October, secured over $10 million from Visa.
In Austin, Method, a platform facilitating debt and repayment options for fintech services for firms like SoFi, has succeeded in raising $41.5 million in a Series B round led by Emergence Capital.
Additional Articles in Progress
Fintech leader Stripe is reportedly laying off 300 employees, according to a leaked memo published by Business Insider, though it still intends to hire in 2025.
On January 22, Indonesia’s antitrust body KPPU imposed a fine of 202.5 billion Rupiahs, equivalent to $12.6 million, on Google for violations concerning its payment systems related to the Google Play Store.
There are intriguing links between Mistral, the French AI startup valued at $6 billion, and Alan, a unicorn in the health insurance sector. Romain Dillet has more on that story.
Data from various sources indicates that more startups have closed their doors in 2024 than in the previous year, which isn’t surprising given the vast number of ventures funded in 2020 and 2021. It appears we are far from finished, as 2025 might usher in another harsh year for startup closures. Check out my in-depth analysis featuring insights from Carta and AngelList.
Headlines of High Interest
HSBC terminates payments app Zing just one year post-launch
Andreessen Horowitz shuts down its UK office and refocuses on the US crypto market
Clutch raises $65M in Series B funding to advance credit unions into the fintech space
Thanks for tuning in! Until next time, follow me on X @bayareawriter for timely fintech updates, coffee insights, and much more.
Compiled by Techarena.au.
Fanpage: TechArena.au
Watch more about AI – Artificial Intelligence
