SoftBank-backed Opendoor to merge with blank cheque firm Social Capital II, and go public

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SoftBank-backed home-selling platform Opendoor is going public through a merger with a blank-cheque company led by venture investor Chamath Palihapitiya in a deal that will value the combined entity at $4.8 billion, the companies said on Tuesday.

Opendoor buys properties from sellers and makes repairs, at a service charge, and then lists them for sale. As part of the deal with Social Capital Hedosophia Holdings Corp II, Opendoor will get $1 billion cash, including $600 million from investors such as BlackRock and Healthcare of Ontario Pension Plan and Palihapitiya.

Social Capital shares jumped 21% in pre-market trade.

A blank-cheque company, also known as a special purpose acquisition company (SPAC), uses capital raised through an initial public offering to buy a private company, usually within two years. The deal then takes the private company public.

Once confined to the backwaters of capital markers, SPACs emerged this year as a major driver of IPOs, led in part recently by deals for space tourism company Virgin Galactic Holdings Inc and fantasy sports and gambling company DraftKings Inc.

Social Capital, the blank-cheque firm backed by Virgin Galactic Chairman Chamath Palihapitiya, raised $360 million when it went public in April.

SPAC acquisitions in 2020 have jumped to a record $27.4 billion, including debt, with a further $35.2 billion of deals announced and pending completion, according to SPAC Research. SPAC deals last year hit $24.8 billion.

Several private companies, including electric carmaker Fisker, healthcare services provider MultiPlan and sales and marketing services provider Advantage Solutions Inc, have gone public through a SPAC deal this year.

Other high-profile investors like Bill Ackman and Michael Klein have also raised billions through their SPACs this year. Ackman’s SPAC Pershing Square Tontine Holdings Ltd raised $4 billion in its IPO in July, making it the largest SPAC IPO.

In 2018, SoftBank’s Vision Fund invested $400 million in Opendoor, which was founded in 2014.

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.