- Social Capital Hedosophia II, a special-purpose acquisition company led by the billionaire investor Chamath Palihapitiya, surged 25% on Tuesday after it confirmed it would merge with Opendoor.
- Opendoor is a property-technology company that directly buys homes from sellers, makes repairs, and then resells them.
- The transaction values Opendoor at $4.8 billion and will provide up to $1 billion in proceeds to fund Opendoor’s growth initiatives.
- “This is my next big 10x idea,” Palihapitiya said in a tweet.
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It’s official: After reports surfaced last week that Opendoor was in talks with Social Capital Hedosophia II, a special-purpose acquisition company led by the billionaire investor Chamath Palihapitiya, both parties confirmed the tie-up on Tuesday.
Opendoor — a property-technology company that directly buys homes from sellers, makes improvements, and then resells them — is set to go public via a merger with Social Capital Hedosophia Holdings II. The deal, which values Opendoor at $4.8 billion, will provide up to $1 billion in proceeds to help fund Opendoor’s growth initiatives.
Palihapitiya said the convenience afforded to homeowners who sell to Opendoor is a quick process of receiving an all-cash offer on their home, among other things.
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Shares of Social Capital Hedosophia II surged as much as 25%, to $16.36, on Tuesday morning.
In an interview with CNBC, Palihapitiya said that real estate was the largest market that had yet to be disrupted by online technologies and that the COVID-19 pandemic had only heightened the need to move the homebuying and selling process online.
Palihapitiya estimated that if Opendoor were able to capture 4% of its target market, that would equate to more than $50 billion in revenue.
“This is my next big 10x idea,” Palihapitiya said in a tweet.