Opendoor Going Public With $4.8 Billion Price Tag

Opendoor is going public through a merger with blank check company Social Capital Hedosophia Holdings Corp. II in a deal that will give the residential real estate startup an enterprise value of $4.8 billion

Shares of Social Capital were up 17% to $15.35.

The deal will provide as much as $1 billion in cash, including up to $414 million held by Social Capital II, a special purpose acquisition company, or SPAC, which is headed by Chairman Chamath Palihapitiya.

In addition, Palihapitiya and funds managed by BlackRock agreed to put in another $600 million through a PIPE, or a private investment in public equity.

Upon completion of the transaction, Opendoor said it expects to have up to $1.5 billion in cash on its balance sheet to fund operations and support new and existing growth initiatives.

Opendoor currently operates in 21 markets across the U.S., including Phoenix, Dallas-Fort Worth, Raleigh-Durham, Atlanta and Orlando.

Since its founding, the company said, Opendoor has served more than 80,000 customers and sold more than $10 billion of homes. In 2019, the company sold more than 18,000 homes, generating $4.7 billion in revenue.

The pandemic forced the company to pause operations and in April Opendoor announced plans to lay off 35% of its staff.

The transaction is the latest example of a startup going public through a SPAC, blank check company.

Earlier this month, QuantumScape, an electric vehicle battery supplier backed by Bill Gates and Volkswagen, said it would go public through a merger with special purpose acquisition company Kensington Capital Acquisition.

Skillz, a mobile-gaming company, said it would go public through a merger with Flying Eagle Acquisition Corp.