Opendoor Secures $400 Million Funding Boost From SoftBank's Vision Fund

Opendoor Secures $400 Million Funding Boost From SoftBank’s Vision Fund

Two weeks ago, we reported that Opendoor, the four-year-old San Francisco-based company aiming to revolutionize the residential real estate market with a few key strokes, was close to securing funding from SoftBank. Today, it’s official: the ink is dry on the deal.

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Terms of the Deal

SoftBank’s massive Vision Fund is investing $400 million for a minority equity stake in Opendoor, with one of its five managing directors, Jeff Housenbold, taking a board seat. This round brings Opendoor’s total funding to slightly more than $1 billion, with the vast majority of it raised in the last six months.

Valuation and Impact

The deal further solidifies Opendoor’s status as a unicorn, although there wasn’t a significant bump in valuation with this newest round. Opendoor continues to be valued at north of $2 billion, according to a source familiar with the deal who declined to provide further details.

SoftBank’s Growing Interest in Real Estate

The move is also another feather in the cap of Housenbold, who previously ran the personal publishing company Shutterfly before joining SoftBank last year. Under his leadership, SoftBank has been closing deals left and right with regional founders he has been tracking.

Opendoor’s Ambitious Plans

At an industry event on Tuesday night in San Francisco, Housenbold talked about SoftBank’s growing interest in real estate deals, which is underscored by yet another deal that closed today: SoftBank also led a $400 million round in Compass, which helps home buyers, sellers, and renters find properties across the U.S.

How Opendoor and SoftBank Came Together

When asked yesterday about how Opendoor and SoftBank came together, Opendoor cofounder and CEO Eric Wu explained that Housenbold first approached him 18 months ago, before he joined SoftBank. "The minute he joined," says Wu, "he reached out to me and let me know that they were interested in investing."

Opendoor’s Business Model

So, what exactly is Opendoor’s business model? According to Wu, the company uses debt to purchase real estate, which is then sold to consumers through a streamlined online platform. This approach allows customers to buy and sell homes quickly and easily, without the need for agents or other intermediaries.

Funding Breakdown

Here’s a breakdown of Opendoor’s funding:

$400 million from SoftBank’s Vision Fund
Total funding: slightly more than $1 billion
Valuation: north of $2 billion

What’s Next for Opendoor?

With this significant investment, Opendoor is poised to continue its rapid growth and expansion. The company has already made significant inroads in the residential real estate market, and with SoftBank’s backing, it’s likely that Opendoor will be looking to further disrupt the industry.