Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group.
Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.
That investment pushes Opendoor’s total equity capital raised above $1 billion – $1.045 billion, to be exact.
In addition, Opendoor said Thursday that it also recently secured $2 billion in debt financing from unnamed “top banks,” meaning the growing company now has more than $3 billion in total funding since it first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014.
Since then, Opendoor has been growing by leaps and bounds and raising money hand over fist.
Opendoor is now operating in nearly 20 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio, and has plans to into California, the Pacific Northwest, and several other areas over the next few months.
Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.
And the company plans to be operating in 50 markets by 2020.
Things are growing equally quick on the funding side of the equation.
Just a few months ago, the company, which buys homes directly from sellers, makes the necessary repairs and improvements, then sells the houses, raised $325 million in its Series E funding round.
That came just 18 months after the company raised $210 million in its Series D round of funding.
Opendoor said Thursday that it plans to use this new money to continue its expansion, which includes the recently announced purchase of Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received.
Opendoor also recently expanded into mortgages and title, and is also connecting home sellers directly with homebuilders to facilitate an all-in-one home selling and buying process, which it calls a “trade in.”
With the acquisition of Open Listings, Opendoor will be able to buy a home directly from a homeowner, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through the company’s own title operation.
In a release, Opendoor laid out how it plans to use all of its new money, including the investment from Softbank:
- Developing a platform to buy, sell or trade-in a home in 1-click, starting with the integration of the recently acquired Open Listings buyer platform
- Integrating additional services such as title and mortgage to make the transaction seamless
- Investing in market-level pricing models across more than 50 cities to accurately price billions of dollars of real estate in real-time
- Building applications that support and drive efficiencies across an ecosystem of local vendors – including contractors, landscapers, painters and home cleaners
The investment is just the latest in a full-blown U.S. real estate investment bonanza for SoftBank.
In December, SoftBank Vision Fund invested $450 million in Compass, a real estate technology company based in New York City. Compass said SoftBank’s investment was the “largest real estate technology investment” in the history of the U.S. And a few years ago, SoftBank led a $1 billion funding round in SoFi, the San Francisco-based lending startup.
SoftBank also becomes the latest in the list of big-name companies investing in Opendoor.
The company’s $325 million capital raise earlier this year was co-led by General Atlantic, Access Technology Ventures, and Lennar, the nation’s largest homebuilder. Also participating in that funding were 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.
“We’re thrilled to partner with SoftBank — they are visionaries with the ambition to transform entire industries,” Eric Wu, founder and CEO of Opendoor, said.
“SoftBank understands that the traditional process of buying and selling a home is complicated, uncertain, and stressful for millions of people, and that Opendoor radically improves the experience,” Wu continued. “We’re excited to widen our ambitions as we launch new products, expand our services, and build an end-to-end experience for millions of people moving each year.”
As part of SoftBank’s investment, SoftBank Investment Advisers Managing Partner Jeffrey Housenbold will join Opendoor’s board of directors.
“Real estate is the biggest asset class in the U.S. and the biggest transaction in people’s lives, but its digital transformation is only beginning,” Housenbold said. “We believe that Eric and his team are redefining home buying and selling by rethinking the status quo and providing a faster and more seamless experience for the customer.”