Opendoor, the US-based real estate transaction platform backed by corporates Lennar, SoftBank, Access Industries and Alphabet, agreed to a reverse merger deal yesterday that values it at $4.8bn.
The company will merge with Social Capital Hedosophia Holdings Corp II (SCH), a special purpose acquisition vehicle that floated in April this year in a $360m initial public offering, and will take the latter’s listing on the New York Stock Exchange.
The deal will be boosted by $414m held in SCH’s trust account in addition to $600m in private investment in public equity (PIPE) financing including $200m from homebuilder Lennar, conglomerate Access Industries and assorted SCH backers.
Funds and accounts managed by BlackRock and Healthcare of Ontario Pension Plan are putting up the other $400m of PIPE financing.
Founded in 2014, Opendoor runs an online platform where users can list, sell and buy homes in 21 US markets. Its mobile app also offers virtual tours and the chance to schedule in-person property visits.
The PIPE financing will be used to expand the company’s business as it looks to expand into new territories and launch new products. Opendoor CEO Eric Wu will retain his position while SCH director Adam Bain will take a board seat at the combined company.
Opendoor was valued at $3.8bn in its last round, which it closed at $300m in March 2019 with backing from Lennar, Access Industries subsidiary Access Technology Ventures, telecommunications and internet group SoftBank’s Vision Fund and GV, part of internet technology conglomerate Alphabet.
Fifth Wall Ventures, General Atlantic, GGV Capital, Khosla Ventures, Hawk Equity, Norwest Venture Partners (NVP), New Enterprise Associates (NEA), SV Angel and unnamed others also took part in the round, which lifted Opendoor’s total funding to nearly $1.35bn. SoftBank Vision Fund had invested $400m in the company six months earlier at a valuation above $2bn.
Lennar, Access Technology Ventures and General Atlantic co-led Opendoor’s $325m series E round in June 2018, investing with property manager Invitation Homes, NVP, GGV Capital, Khosla Ventures, NEA, Andreessen Horowitz, Coatue Management, Lakestar and, 10100 Fund.
The company had secured $100m in debt financing from Lennar five months earlier alongside $35m in equity funding from Fifth Wall.
NVP led Opendoor’s $210m series D round in 2016, which included Access Industries, NEA, Khosla Ventures, GGV Capital, Fifth Wall, Lakestar, SVC Capital, Caffeinated Capital and Felicis Ventures at a valuation topping $1bn.
The 2016 round came after an $80m series C led by Access Industries at a $580m valuation the previous year. The company’s earlier investors include SV Angel, GGV Capital, Khosla Ventures, Thrive Capital, Caffeinated Capital, Sherpa Ventures, Haystack Fund and the Mack Family.
