Opendoor, the startup that operates an online platform for buying and selling homes, has raised $300 million, giving it a valuation of $3.8 billion. According to a report, it was previously expected the startup would raise $200 million with a valuation of $3.7 billion.
The latest fundraising round included General Atlantic, a previous investor. Others participating were Hawk Equity, the SoftBank Vision Fund, Access Technology Ventures, Lennar Corporation, Fifth Wall Ventures, SV Angel, Norwest Venture Partners, NEA, GGV Capital, Khosla Ventures and GV, noted the report. The company has raised $1.3 billion in equity, with $3 billion in debt financing used to buy homes. The funding underscores investors' interest in real estate, as well as the attractiveness of startups that are disrupting the traditional market.
“Our business is designed to operate in up markets, down markets and flat markets,” Co-founder and CEO Eric Wu said in an email to the news outlet. “During a slowdown, it becomes increasingly more painful to sell a home, which impacts mobility for homeowners and increases the need for reliable home sales through products like Opendoor. It is our responsibility to manage that risk and charge the proper fees to account for the volatility.” Last year alone, Opendoor claims more than 800,000 people toured its homes, noted the report.
Aiming to shake up the real estate market, Opendoor relies on data modeling to pinpoint opportunities to take advantage of gaps in the market and to price the properties correctly. That increases the predictability of selling properties the startup acquires and protects it during downturns.
“The company has not been around during a national housing recession, but it is preparing day in [and] day out for if and when it happens, and believes it will be well-equipped if it does,” said Anton Levy, managing director of General Atlantic, in an interview with the newswire.
