“Given the vast amount of attention on the Vision Fund, people have become more curious,” he said.
Opendoor, one of the largest start-ups in the proptech category, gives the Vision Fund an entry into residential housing. The Silicon Valley company was founded in 2014 by venture capitalist Keith Rabois and Eric Wu, who is Opendoor’s chief executive. With the money from SoftBank, it has raised more than $1 billion from investors including Khosla Ventures and GGV Capital.
Opendoor’s goal is to make moving as simple as the click of a button, according to Mr. Wu. While that remains a far-off reality, the company has simplified the process of selling a home. It uses a combination of data, software and a team of 50 human evaluators to assess a home’s value. If a customer accepts Opendoor’s value for their home, the company will buy the property, charging a 6.5 percent fee on average.
The company said it offers sellers certainty — many conventional home sales fall through — and flexible closing dates, helping them avoid paying double mortgages. It also eliminates the need for a real estate agent. Opendoor employs 100 licensed real estate agents to advise customers if they request it.
Opendoor only buys homes built in 1960 or later, worth $175,000 to $500,000, and not in need of major renovations or repairs. Operating in more than a dozen cities, mostly in the South, it bought $316 million of homes in August, up from around $100 million in January. After some light fixes, it sells the homes in an average of 90 days.
Before its latest cash infusion, Opendoor planned to expand into one new city a month. Now it plans to double that pace. The company said it expects to be in 22 cities in the United States by the end of the year.
Its growth has spawned competitors: OfferPad and Knock offer comparable services to Opendoor, and Zillow and Redfin, which are both publicly traded, have entered the house-flipping market as well.
“For awhile, we were literally the only ones doing this because it’s complex,” Mr. Wu said. Size is an advantage, he said: More transactions means more data to help Opendoor price its offers more accurately, as well as more buying power with local suppliers for renovations.
