Opendoor

Opendoor is an online real estate company based in San Francisco. It makes as-is cash offers to property sellers through an online process, improves and repairs the properties it purchases, and relists them for sale.[1][2]

Opendoor
TypePublic
NASDAQ: OPEN
IndustryReal estate development, Property management, Real estate
Founded2014
FoundersKeith Rabois, Eric Wu, Ian Wong, JD Ross[1]
Headquarters
San Francisco
,
United States
Number of employees
1001-5000
WebsiteOpendoor

Business Model

Property owners bid to sell their properties on the online platform. When a bid is accepted, Opendoor purchases the property as-is, charging a fee comparable to the commissions real estate agents collect in return for the convenience of closing a sale quickly without home showings.[3]

Opendoor then makes necessary repairs before relisting the property. By following this process, the company is known as an "iBuyer” in the real estate industry.[4] Through this process, Opendoor carries an inventory of homes. In 2019, the company reported that the average time a property is held by the company is 90 days.[5] The company has considered renting properties to make use of excess inventory.[6]

History

The company was founded in March 2014 by serial entrepreneurs Keith Rabois, Eric Wu, who previously founded Movity, a real-estate startup acquired by Trulia, and JD Ross, now a general partner at Atomic. After raising a $9.95m venture capital round led by Khosla Ventures in May 2014, the company began operations.[2] In 2018, Opendoor raised $400m in funding from the SoftBank Group Vision Fund.[7] In 2019, it raised $300m in a funding round led by General Atlantic. At the time, the enterprise valuation was $3.8b.[5]

In August 2019, Opendoor launched mortgage services through Opendoor Home Loans, an in-house mortgage business.[8] In September 2019, it acquired national title and escrow company OS National, allowing integration of title, escrow and closing services under its business offerings.[9]

In early 2020, Opendoor expanded services to more cities in partnership with Redfin.[10] Later, due to business impact from the COVID-19 shutdown, the company laid off 600 employees, which made up 35% of its team, partially due to business impact from the COVID-19 shutdown.[11] In March, Opendoor announced they would suspend home buying during the COVID-19 pandemic out of concerns for the safety of their customers. [12] The company resumed its operations in May 2020 by introducing a contact-free platform to help people buy and sell homes digitally.[13][14]

On April 27, 2020, Social Capital Hedosophia Holdings Corp II, a SPAC steered by Chamath Palihapitiya, commenced trading on the New York Stock Exchange.[15]

On September 15, 2020, Social Capital Hedosophia Holdings Corp II announced its intention to merge with Opendoor.[16] The deal valued Opendoor at an enterprise value of $4.8 billion.[17][18]

On December 17, 2020, shareholders of Social Capital Hedosophia Holdings Corp II approved the merger.[19] On December 21, 2020, the merger was finalized and the company began trading on the NASDAQ stock exchange under its new name, Opendoor. [20]

References
  1. "Opendoor". Crunchbase. Retrieved 2020-05-16.
  2. "With $10M and a long list of big-name investors, Opendoor is almost open for business". Venturebeat. Retrieved 2020-05-16.
  3. "Home-flipping giant Opendoor says it's time to resume buying". Bloomberg. Retrieved 2020-05-16.
  4. "What Is an iBuyer? iBuying Explained". Fool. Retrieved 2020-05-16.
  5. "Opendoor raises $300M on a $3.8B valuation for its home marketplace". Techcrunch. Retrieved 2020-05-16.
  6. "OpenDoor back open for business". Daily Beat NY. Retrieved 2020-05-16.
  7. "Opendoor just raised $400 million in funding from SoftBank's Vision Fund". Techcrunch. Retrieved 2020-05-16.
  8. Lane, Ben (29 August 2019). "Opendoor is now a mortgage lender, launches Opendoor Home Loans". HousingWire.
  9. Rosenbaum, Eric (5 September 2019). "Opendoor buys title company OS National in bid to own more of residential real estate market". CNBC.
  10. Falcon, Julia (13 February 2020). "Opendoor and Redfin expand homebuying partnership to nine new cities". HousingWire.
  11. "SoftBank-backed Opendoor has announced a massive layoff, cutting 35% of its employees". Techcrunch. Retrieved 2020-05-16.
  12. "Opendoor, Zillow begin pausing homebuying, citing coronavirus concerns". HousingWire. 2020-03-20. Retrieved 2020-06-08.
  13. "Opendoor returns to homebuying with contact-free selling". Inman. Retrieved 2020-06-08.
  14. Writer (August 18, 2020). "Opendoor resumes iBuying in all pre-pandemic markets". Inman.
  15. https://www.sec.gov/Archives/edgar/data/1801169/000110465920054449/tm2017926d1_ex99-1.htm
  16. https://www.sec.gov/Archives/edgar/data/1801169/000110465920105058/tm2030504d1_ex99-1.htm
  17. Kirsch, Noah (September 15, 2020). "Home Buyer Opendoor Is Going Public In $4.8 Billion Merger". Forbes.
  18. Picker, Leslie (15 September 2020). "Palihapitiya finds next '10x idea' with $4.8 billion SPAC deal for real estate start-up Opendoor". CNBC.
  19. https://www.sec.gov/Archives/edgar/data/1801169/000110465920136760/tm2038661d1_8k.htm
  20. "Opendoor's Market Debut Caps Roller Coaster Year in Housing". Bloomberg.com. 2020-12-21. Retrieved 2020-12-30.
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