Opendoor, founded in 2014. Founders: Eric Wu, Ian Wong, JD Ross, Keith Rabois.
Opendoor is an operator of an online real estate marketplace used to streamline the sales process of home buying and selling.
It helps sellers to receive an offer without listing or showing their home and buyers to browse for homes on sale and instantly unlock them using the company's application that enables customers to buy and sellproperties in a hassle freeway. The company has been recognized as the most innovative company in real estate by Inman, the industry's leading source of real estate information, for the past three years.
Opendoor, backed by a $400 million investment from SoftBank, was hit hard by the pandemic in 2020 and cut 35% of its workforce in April. As the home resale business started to recover, Opendoor looked for capital to fuel expansion and opted to go public by merging with Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. II (SCH).
Chamath Palihapitiya is the founder and CEO Social Capital, SCH. He is a pioneer in taking private unicorns public by reverse merging them into SPAC — an idea he’s called “IPO 2.0.”
The deal valued Opendoor at $4.8 billion, almost equal to its revenue in 2019. The newly formed company is named Opendoor Technologies Inc. As part of the deal, the company got about $1 billion cash, including $600 million from Palihapitiya and other investors, including BlackRock and Healthcare of Ontario Pension Plan.
SCH sold shares in an April IPO at the share price of $10 and raised $360 million. After completing its planned merger, Opendoor Technologies Inc began trading on the Nasdaq on December 21, 2020. The stock closed its first day of trading at $31.25, well above its initial share price of $10. In their Nasdaq debut, the shares of the home-selling platform ended 5.9% higher.
Opendoor’s Co-Founder and CEO, Eric Wu, continues to lead the newly formed company with Adam Bain, former chief operating officer at Twitter and director at SCH, joining the Opendoor Board.
Spaceflight company ‘Virgin Galactic’ and sports betting startup ‘DraftKings’ also went public via SPAC in 2020. Most recently, ‘Skillz’ started trading on the New York Stock Exchange after merging with a SPAC.
Opendoor is one of a few premium companies to go public via SPAC in 2020. With investors and public figures like Reid Hoffman and Paul Ryan forming blank-check companies, SPACs have gotten a lot more attention this year.