On Sept. 15, Opendoor, a leading iBuying platform in residential real estate, announced plans to become a publicly traded business through a definitive combination agreement with Social Capital Hedosophia II (SCH), a special purpose acquisition company.
The transaction will enable Opendoor to continue to grow market share in existing markets, expand to new markets, and launch new products that make real estate transactions even more seamless.
“We founded Opendoor to make it simple and instant to buy and sell a home, to delight customers and make their lives less stressful, and to build an iconic, once in a generation company,” says Eric Wu, founder and CEO of Opendoor. “This is one of many milestones toward our mission and will help us accelerate the path toward building the digital one-stop-shop to move.”
The business combination values Opendoor at an enterprise value of $4.8 billion. According to the press release, the transaction is expected to deliver up to $1 billion of gross proceeds, including the contribution of up to $414 million of cash held in SCH’s trust account from its initial public offering in April 2020. The transaction is further supported by a $600 million PIPE at $10 per share, with $200 million from entities affiliated with SCH.
Opendoor’s management team, led by Wu, will continue to lead the company, while SCH’s director Adam Bain will join the merged company’s board of directors upon completion of the transaction.
“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,” says Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia II. “Opendoor perfectly embodies this vision. 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.”
