The target funding amount would bring the company's total equity capital raised to over $500 million since its founding in 2014. It also has raised more than $1 billion of debt to help finance its purchases of homes, said a person familiar with the matter. The new money is intended to help fund an expansion of its business in its six U.S. metro areas, where it needs additional equity to finance the purchase of more homes, and to enter new markets across the U.S., these people said. Previous investors include Access Industries, Felicis Ventures, GGV Capital, Khosla Ventures, New Enterprise Associates and Norwest Venture Partners. The company, which does business as Opendoor, is the largest of a new class of companies that offer cash to buy homes online, and then seek to resell them at a slightly higher price after making basic improvements.
Opendoor, which has already raised billions to buy homes over the internet, just landed another large investor: the SoftBank Vision Fund. The fund, part of SoftBank Group Corp., is investing $400 million in Opendoor, whose flagship service uses home-pricing algorithms to make rapid, all-cash offers to sellers, charging a fee for simplifying the selling process. The new investment values the company at more than $2 billion, according to a source with knowledge of the matter, who asked not to be named because it is private. Opendoor has now raised more than $1 billion in equity and more than $2 billion in debt from investors including General Atlantic LLC, Access Technology Ventures and homebuilder Lennar Corp. "Buying and selling real estate is a massive life disruption," said Eric Wu, chief executive officer of Opendoor. "How do we make it so that when you find a home of your dreams, you can just click a button and everything is handled for you?
OfferPad cofounders and co-CEOs Brian Bair (left) and Jerry Coleman have launched their home-buying platform in six markets and hope to be in more than 30 by the end of 2020. OfferPad, a startup that uses data to change the way that Americans buy and sell homes, said today that it had raised $30 million in equity and $230 million in debt from LL Funds in order to expand its home-buying model. Like Opendoor, which we profiled in the December 20 issue of FORBES magazine, just before it was catapulted into unicorn territory, OfferPad relies on technology to make offers to homeowners, who value the certainty of a sale and the ability to close within days over getting the highest price. The deal values the Gilbert, Ariz.-based company at $110 million. Jerry Coleman, 43, a cofounder of Blackstone's Invitation Homes, and Brian Bair, 40, a top-selling real estate broker, founded OfferPad in mid-2015 and serve as its co-CEOs.
Zillow is no longer just a real estate marketplace that can help find your next home -- the company has decided to become an active participant in the field. In an announcement today, Zillow has revealed that it'll flip houses in Phoenix and Las Vegas starting this spring. The company has teamed up with local brokerages in those areas to offer sellers money for their homes. If they accept, Zillow will make repairs and then list those houses on its own marketplace as quickly as possible. By choosing to buy and sell houses, Zillow is now officially an OpenDoor competitor.
Eric Wu, Opendoor's chief executive and co-founder, said the company will use the money to expand faster than originally planned--a common trait of SoftBank-backed companies. "We were planning to launch a city a month, and now we're planning two a month," Mr. Wu said. The company offers its service in 19 markets. Real estate has become a main industry of focus for SoftBank and its $92 billion Vision Fund, which is backed largely by wealth funds from Saudi Arabia and Abu Dhabi. Since 2017, the fund has now led fundraising rounds totaling more than $8 billion into most of the largest startups in the sector.