Looks like more Wall Street money is really flowing into the real estate business. And it also looks like there might be some synergies soon between Opendoor and Compass in the future…
On Thursday (while we were all glued to Washington, D.C.) Opendoor announced a $400 million investment from the SoftBank Vision Fund.
Who is Softbank Vision Fund?
It’s a giant Japanese venture capital fund with $100 billion to dole out, and the company apparently really likes the real estate industry.
At Inman Connect San Francisco this summer, here is what SoftBank’s senior investor, Justin Wilson, said the company is looking for:
“When we look at businesses, we want to find opportunities of companies that are really leveraging data extensively and in everything that they’re doing. We want to invest in platform businesses,” he said. “When we’re putting hundred-million, billion-dollar checks behind these companies, they have to have the potential to be very large businesses.”
SoftBank invested early in Alibaba (a Chinese on-line company that is Amazon’s only global competitor), SoFi, WeWork, Compass and an Indian competitor to Uber called Ola. WeWork, as I mentioned this morning, is huge.
So what will OpenDoor do with this new dough?
The company will use the money to accelerate integration of its in-house mortgage services, title services and buyer’s brokerage (via a recent acquisition of another startup, Open Listings) into its core offering to homesellers, and to continue its expansion from a current 16 markets to 50 markets by 2020.
50 markets by 2020, sounds like Compass’ goals.
Opendoor CEO Eric Wu told Inman that OD has spent the last three years “building a way for homeowners to sell their home online in a few clicks. What we want to do is actually make buying a home on-demand simple and instant, and we’ll be building the underlying technology and infrastructure for that.”
Which is all fine and good if consumers like the process, of course. Opendoor launched in North Texas in February of 2015, and has grown to become the largest acquirer of single-family homes in both the US and the Dallas Metro area. Opendoor is NOT a home flipper, as some have called it. And it is NOT Door, which is a flat fee, locally owned brokerage.
Opendoor employs nearly 110 people in North Texas, with plans to expand the local office
Opendoor has already expanded to San Antonio and Houston, and plans to also use this funding to open up Austin in November, 2018.
“We’re thrilled to partner with SoftBank — they are visionaries with the ambition to transform entire industries,” Wu said in a statement.“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.”