Opendoor, a real estate tech startup based in Phoenix, has made a name for itself through its business model: Opendoor makes “instant offers” on certain homes online, buying them in a matter of days and then flipping properties.
Now, the company has just solidified its standing in the marketplace. According to a story reported in The Wall Street Journal, Opendoor raised $80 million in October in a third funding round. Access Industries, owned by billionaire Len Blavatnik, led the funding round; Access valued Opendoor at about $580 million.
As of mid-December, Opendoor bought and sold more than 200 homes. “Opendoor made an average estimated profit of between $10,000 and $15,000 on these homes, when including the roughly 9 percent in fees it earns from the seller, and subtracting costs to resell the home,” reported the WSJ.
“We’re planning on using the capital to expand to new markets,” said Eric Wu, Opendoor’s CEO, in an emailed statement. He noted that Opendoor is live in its second market — Dallas, Texas — after launching successfully in Phoenix.
Some experts note that this is a business model that could take a major (and unsurvivable) hit in an economic downturn.
That might be the case, but if so, the company now has tens of millions more in cash to help it weather any unpredicted storms.