Opendoor co-founder and Executive Chairman Keith Rabois. Photo credit: The DEMO Conference, under Creative Commons license

 Opendoor, the home buying marketplace, has reached a deal to go public by merging with Social Capital Hedosophia Holdings Corp. II, a publicly-traded special purpose acquisition company (SPAC). The targeted merger is expected to add $1 billion in cash to Opendoor’s balance sheet, consisting of $414 million already secured by Social Capital Hedosophia Holdings Corp. II and the remaining $600 million to be raised from investors including BlackRock, the Healthcare of Ontario Pension Plan, Social Capital’s Chamath Palihapitiya who has himself committed to invest $100 million, and some existing Opendoor executives and shareholders. The reverse merger is expected to give Opendoor an initial valuation of $4.8 billion.

As a private company, Opendoor has raised more than $1.3 billion in equity funding from a host of investors. The San Francisco-based company has also raised billions more in debt financing for its operations. Opendoor is a leader in a real estate market that’s referred to as ‘iBuying’, where homeowners are able to sell their home without a broker or real estate agent. Opendoor buys homes from owners and then flips it for a profit after maintenance and possible customizations. Since its inception, Opendoor says it’s sold over $10 billion worth of homes, including $4.7 billion in 2019 alone. Opendoor has served over 80,000 customers since its inception. 

Currently, Opendoor operates in 21 markets across the US and plans to expand into more. The company also aims to launch new real estate transaction products in the future time. Following the completion of its targeted merger, Opendoor’s current management which includes CEO Eric Wu and Executive Chairman Keith Rabois will continue to lead the company. 

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