iBuying Startup Offerpad To Merge With Zillow Co-Founder’s SPAC
Offerpad, a real estate tech startup focused on iBuying, has sealed a deal to be taken public through a merger with a special-purpose acquisition company (SPAC) and not just any SPAC but one formed by a co-founder of Zillow which’s one of the biggest real estate tech companies globally.
Offerpad has announced an agreement to merge with Supernova Partners Acquisition Company (NYSE: SPNV) and start trading on the public markets as a result. Supernova is a SPAC formed and led by Spencer Rascoff, a serial tech entrepreneur who’s the co-founder and former CEO of Zillow.
- Offerpad’s SPAC merger agreement values the six-year-old startup at $3 billion. The merger will hand over $650 million of gross cash proceeds to the startup, split into $403 million held in trust by Supernova and $250 million in additional investment commitments from firms including national homebuilder Taylor Morrison Home Corp and asset management giant BlackRock.
- Offerpad will be the second iBuying startup to take the SPAC route to the public markets after Opendoor. To the uninitiated, iBuying refers to instant cash offers to purchase customers’ homes with an aim to flip them later. It’s a relatively new offshoot of the real estate industry that’s pulled the interest of a handful of real estate tech companies, both existing and newer ones.
- Offerpad’s major competitors include Opendoor and Zillow, whose co-founder ironically is taking Offerpad public with his SPAC. Rascoff left Zillow last year so there’s definitely no conflict-of-interest in that.
- A six-year-old startup, Offerpad says it expects to generate $1.4 billion in revenue this year. Such stat indicates a very high growth rate for the company as it grew from scratch to expectations of over $1 billion in annual sales in just six years. It says nearly $7 billion worth of homes have been transacted on its platform since inception.
- Offerpad’s merger with Supernova is expected to be completed in the second or early third quarter of 2021, after which it’ll start trading on the New York Stock Exchange.
- “As they bring more transactions online, we believe online real estate as a whole is poised to grow rapidly in the coming years and that Offerpad is incredibly well-positioned to grab a huge piece of this market,” Spencer Rascoff said in a statement.
More SPAC News;