- Opendoor is in advanced talks to go public via a merger with Social Capital Hedosophia Holdings Corp. II, a “blank check” company, or SPAC, led by billionaire investor Chamath Palihapitiya, Bloomberg reported on Thursday.
- Opendoor is a property technology company that directly buys homes from sellers, makes some improvements to the homes, and then resells them.
- While the transaction is not yet finalized and the deal can fall apart, Bloomberg said, investors are nonetheless bidding shares of the SPAC higher by as much as 7% in Friday trades.
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Opendoor, a property technology company, is in advanced talks to go public via a merger with Social Capital Hedosophia Holdings Corp. II, Bloomberg reported on Thursday.
Social Capital is a “blank check” company, or a SPAC, that has been on the hunt for a technology company to acquire since it began trading in April. The SPAC is led by billionaire investor Chamath Palihapitiya.
This isn’t Palihapitiya’s first rodeo in the SPAC world. His first foray was in 2019 when space exploration company Virgin Galactic went public via a merger with a SPAC led by Palihapitiya.
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Opendoor operates a business akin to Zillow’s relatively new homebuying program. The San Francisco-based firm directly buys homes from sellers, makes minor repairs to the homes, and then resells them for a profit.
Some of the benefits to the home-seller include less home-selling fees and increased flexibility around move-out and closing dates, according to its website.
In its latest funding round in 2019, Opendoor was valued at $3.8 billion. According to Bloomberg, Opendoor would be valued around $5 billion in a deal with Social Capital.
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A potential deal with Opendoor could be good timing given its exposure to the housing industry. In recent months following the onset of the COVID-19 pandemic, the housing industry has seen a boom in business as city dwellers look to escape to the suburbs following months of stay-at-home orders.
The deal is expected to be announced in the coming weeks, Bloomberg said. Shares of Social Capital Hedosophia Holdings Corp. II surged as much as 7% in Friday trades.
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