iBuying platform Opendoor said it will merge with Social Capital Hedosophia Holdings Corp. II. to become a public company using the special purchase acquisition company in a deal that values Opendoor at $4.8 billion and provides it with up to $1 billion in cash proceeds.
The transaction announced on Tuesday is also supported by a $600 million so-called private investment in public equity, or PIPE, at $10 per share, with $200 million from entities affiliated with Social Capital, including $100 million from Chamath Palihapitiya, founder and CEO of Social Equity, $58 million from Hedosophia, and the remainder from existing Opendoor shareholders, Access Industries and Lennar, along with Opendoor management, the release said.
The company said the transaction will allow Opendoor to continue to invest in growth, market expansion and new products to accelerate its overall plan to become a digital one-stop-shop for homeowners.
“We created the IPO 2.0 platform to identify and partner with iconic technology companies with proven management teams and assist in their transition to the public markets,” Palihapitiya said in a release.
“Opendoor perfectly embodies this vision,” Palihapitiya said. “The Company is transforming the $1.6 trillion residential real estate market by combining a superior user experience, streamlined operations and machine learning to create a seamless digital experience. We are excited to work with Eric and the supremely talented Opendoor team to unlock homeownership for millions of Americans.”
Opendoor’s management team, led by Founder and CEO Eric Wu, will continue to lead Opendoor, the company said. Once the transaction is complete, Social Capital Hedosophia Holdings Corp. II Director, Adam Bain, will join the merged company’s Board of Directors.
Last month, the iBuyer resumed operations in all 21 of its markets after pausing in March as a result of COVID-19.
Opendoor also launched a brokerage last month.