One of the biggest players in the growing direct homebuyer segment is about to get much, much bigger.
Opendoor, an online marketplace that buys homes directly from homeowners, announced Wednesday that it secured $325 million in new funding and is planning a nationwide expansion of its homebuying platform.
Opendoor buys homes directly from sellers, makes the necessary repairs and improvements, then turns around and sell the houses on its own marketplace.
Opendoor’s $325 million Series E funding round comes just 18 months after the company raised $210 million in its Series D round of funding.
Since then, the company expanded into new markets and launched a foray into mortgages as well.
Opendoor first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014, and is now operating in 10 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio.
With this new injection of funding, Opendoor is now planning to dramatically increase the size of its operation, plotting expansion into 50 total markets by the end of 2020.
The company also plans to expand and scale its offerings, which also include mortgage and title. According to the company, that will allow people to “search, discover, visit, get financing, offer, and close in a single, seamless experience.”
And perhaps even more interesting that what Opendoor plans to do with the money is who the money is coming from.
This funding round was led by co-led by General Atlantic, Access Technology Ventures, and Lennar, the nation’s largest homebuilder.
The funding also deepens the relationship between Opendoor and Lennar, which previously helped Opendoor pilot a “Trade Up” program, which allows a homeowner to sell their home to Opendoor and buy a newly built Lennar home all in one transaction.
Opendoor recently expanded the program to other homebuilders as well.
As part of the funding, Lennar President and Chief Operating Officer Jon Jaffe will be joining Opendoor’s board.
“We have spent the last year and a half working closely with the Opendoor team to create a first-of-its-kind ‘Trade Up’ program to meet the needs of both the consumer and the builder,” Jaffe said. “Our increased investment in this round is a reflection of our enthusiasm for the opportunities that lie ahead — which are incredibly exciting.”
Also participating in the funding were new investors top Silicon Valley venture capital firm Andreessen Horowitz, Coatue Management, 10100 Fund, and Invitation Homes, one of the nation’s leading operators of single-family rental housing.
Andreessen Horowitz, which previously invested in tech giants like Facebook, Airbnb, and Twitter, has taken an interest in real estate lately, investing in PeerStreet, an online marketplace for real estate-backed loans, Point, a financial technology platform that offers homeowners the opportunity take equity out of their home without taking on new debt, and another direct homebuyer, FlyHomes.
10100 Fund is the venture capital fund launched recently by ousted former Uber CEO Travis Kalanick. The investment in Opendoor is 10100 Fund’s first public investment since the fund’s founding earlier this year.
Several of Opendoor’s existing investors, including Norwest Venture Partners, Lakestar, GGV Capital, NEA, and Khosla Ventures also participated in the round.
“We’re excited to partner with seasoned investors and industry leaders who share our vision for transforming the complex process of selling and buying homes into a seamless, elegant experience,” Eric Wu, CEO of Opendoor said.
“We’ve seen incredible growth in our markets as homeowners embrace the simplicity and certainty of buying and selling through Opendoor,” Wu added. “As we enter our next phase of growth, we’re focused on continuing to transform the future of real estate, enabling anyone to buy, sell, or trade-in a home with the click of a button.”
According to the company, Opendoor now buys more than $2.5 billion in homes on an annual run rate, up more than 225% year-on-year.
With this new capital raise, Opendoor has now raised a total of $645 million in equity thus far, along with $1.5 billion in debt financing.
“Residential real estate is one of the largest asset classes in the U.S., yet the process of buying or selling a home often includes stress, uncertainty, and inefficiency," said Anton Levy, managing director and global head of technology of General Atlantic. “Opendoor’s technology platform provides its users with a simplified experience that disrupts this status quo and we look forward to working with Eric and the entire Opendoor team to further expand the company’s footprint.”