Opendoor, the real estate startup that has a marketplace platform, has raised $210 million in a Series D round of financing.
According to a report, Norwest Venture Partners said it led the round of funding, which will be used to expand Opendoor’s service into 10 cities. Unlike other real estate startups, Opendoor owns the inventory of homes and makes it easy for buyers and sellers to purchase homes on the platform. For those selling a property, Opendoor gives the homeowner a valuation, and once it is accepted, Opendoor buys the home and tries to flip it to make a profit. To lure buyers to the platform, Opendoor enables self-guided tours at any time thanks to smart locks and security cameras. If a person buys a home form Opendoor, it receives a 180-point inspection, warranty and 30-day money-back guarantee, noted the report.
A year ago, Opendoor raised $80 million in a Series C round of funding and, all told, has raised $320 million, giving it a valuation of more than $1 billion. The other investors in the startup include NEA, Khosla Ventures, GGV Capital, Access Industries, FifthWall, Lakestar, SVB Capital, Caffeinated Capital and Felicis Ventures, according to the report. In addition to venture funding, the startup also has hundreds of millions of dollars of debt, which it uses to purchase the real estate properties. The debt load could hurt the startup if there is an economic downturn, but Opendoor thinks a so-called “frictionless” marketplace reduces the risk the company faces. The way Opendoor sees it, if the real estate market were to collapse, homeowners would sell their houses for whatever they could, and Opendoor would get a piece of that regardless of the state of the market. Opendoor has 200 employees, noted the report.