US real estate startup Opendoor’s valuation tops $2b after new funding

Drone view of similar houses, driveways, and yards in the Utah suburbs. Photo: Blake Wheeler/Unsplash

Online real estate company Opendoor said on Wednesday it has raised $325 million in new financing, the latest so-called mega-round in venture capital as investors eagerly deploy their record-size funds.

The new funding puts San Francisco-based Opendoor’s valuation at more than $2 billion, according to a source familiar with the matter. The round was led by investors General Atlantic and Access Technology Ventures, as well as home construction company Lennar Corp. Investors Andreessen Horowitz, NEA and Norwest Venture Partners, among others, joined the round.

Opendoor bids on homes, buys them and then sells them, charging a fee of about 6.7 percent to 13 percent. The company says it eliminates steps such as finding a real estate agent and hosting open houses, and homeowners are not stuck waiting to sell their house before they can move or forced to juggle two house payments.

Founded in 2014, Opendoor has yet to be tested by a housing market crash.

The company is on pace to spend more than $2.5 billion on home purchases over the next year, with the average price of a home at $250,000. The company declined to provide its revenue from selling homes.

More startups like Opendoor are raising mega-rounds, the term for funding rounds of $100 million or more, as venture capital firms raise larger funds and write larger checks to compete with investors like SoftBank Group Corp, which has a war chest of billions of dollars. In the first quarter this year, U.S.-based startups raised 34 mega-rounds, almost double the number raised in the same time period a year ago, according to data firm CB Insights.

Opendoor investor NEA last year raised its largest fund ever, $3.3 billion, and Norwest Venture Partners this year closed a $1.5 billion fund, its largest to date.

The round brings Opendoor’s total fundraising to $645 million, and the company has also raised about $1.5 billion in debt. It plans to expand to 50 markets from the 10 markets it operates in today.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.