What do Wells Fargo, Yelp CEO Jeremy Stoppelman, Deutsche Bank, reddit co-founder Aleix Ohanian, Blackstone and Joshua Kushner (yes, the brother of President-elect Donald Trump’s son-in-law, Jared Kushner) have in common?
They’re all investors or lenders that have funded Opendoor, a startup that’s turning the real estate industry on its head with $720 million in equity and debt financing.
At least 53 of the world’s biggest financial institutions, venture-capital firms and high net-worth individuals have either invested in or extended credit to the property-exchange platform now valued at more than $1 billion.
Blackstone and Deutsche Bank are two of at least four financial institutions to have financed Opendoor’s property purchases, an Inman review of property records reveals for the first time.
There’s also evidence to suggest that Blackstone could package loans to Opendoor into a bond known as a mortgage-backed security (MBS) — a technique that could allow Opendoor to tap into capital from many other institutional investors. (Opendoor would not confirm this, but a spokeswoman with a Blackstone company said it was a possibility.)
Opendoor has inside lines to the single-family rental, short-term rental and high-tech financing industries — along with a close relationship with Wells Fargo, an analysis of Opendoor’s roster of investors on CrunchBase also suggests.
At least four entities that have owned equity in Opendoor also have invested in single-family rental marketplace Roofstock, including Opendoor CEO Eric Wu. Could Roofstock, which has clear synergies with Opendoor, be a future acquisition target?
In addition, consider that a co-founder of Opendoor investor Fifth Wall, which also invests in Roofstock, played a leading role in building Blackstone’s Invitation Homes, a single-family rental investor that gobbled up around 50,000 U.S. single-family homes over the past five years.
Potentially providing more clues about its financing and holding strategies, Opendoor has shared at least six investors with Airbnb, at least four with short-term rental management service Pillow and many others with various fintech startups.
Spokeswoman Heather Staples said Opendoor currently is not renting out any of its homes, and it has “nothing to announce regarding future plans,” when asked if that might change.
Read on for a full list of the tech and finance heavyweights that have backed Opendoor, along with some insight into its loan agreements.
Note that some entities in our list no longer back Opendoor, having stopped lending to Opendoor or possibly cashed out their equity.
(Staples said Opendoor’s Crunchbase profile contained some inaccuracies, but didn’t specify them by press time.)
Opendoor lenders (former or current)
1. Blackstone (via B2R Finance)
B2R Finance is a Blackstone company that offers “buy-to-rent mortgages” and fix-and-flip financing to property investors.
The firm’s bundled some of its buy-to-rent mortgages into bonds known as mortgage-backed securities (MBSs), and there’s evidence to suggest that it plans to do the same with loans it made to Opendoor.
In May 2015, B2R announced it had acquired Dwell Finance and would begin providing “fix-and-flip” loans, not just buy-to-rent mortgages. Before the acquisition, Dwell Finance had also made buy-to-rent loans with plans to package them into MBSs.
Property records show B2R quickly passed on the loans it made to Opendoor to a Dwell Repo Seller 1, LLC, after ceasing to make new loans to Opendoor in the fall of 2015.
Dwell Repo Seller 1 shares the same address as Dwell Finance, and the use of “repo” — short for “repurchase agreements,” which are used extensively in the MBS market — raises the possibility that B2R’s loans to Opendoor might be packaged into what could be called a “fix-and-flip MBS.”
This could open the floodgates for more institutional investors to fund Opendoor, such as pension funds, insurance companies, mutual funds and hedge funds.
Opendoor spokeswoman Staples said she wasn’t able to learn if the loans transferred by B2R to Dwell Repo Seller 1 had been pooled into an MBS.
B2R spokeswoman Sara Sefcovic said that B2R has not offered bonds made up of fix-and-flip loans, but added that B2R is evaluating the option, among other “potential exit opportunities for those loans.”
Staples said that Opendoor no longer has a credit line with B2R Finance. (Records suggest B2R stopped lending to Opendoor in 2015.)
2. Deutsche Bank (via Deutsche Bank AG, New York Branch)
Deutsche Bank, Germany’s leading bank, also operates investment banking and asset management arms. Opendoor was using a line of credit from Deutsche Bank of $150 million to buy homes in the Dallas-Fort Worth area through December, property records show.
They also suggest Wells Fargo — whose venture arm led Opendoor’s Series D $210 million funding round — is servicing this debt on behalf of Deutsche Bank.
3. Genesis Capital
The Woodlands Hill, California-based lender provides financing to home flippers with interest rates starting at 10 percent, according to the company’s website. Genesis Capital has financed Opendoor’s purchases of homes in Phoenix and the Dallas-Fort Worth area.
4. Fortress Investment Group (via DBD and Fortress Credit)
Fortress Investment Group is a global-investment firm with $70.1 billion under management as of September.
Property records suggest the company financed Opendoor purchases in the Fort Worth area through two subsidiaries: first, through a $75 million line of credit from Fortress Credit, and later, through a $100 million line of credit from DBD Credit Funding.
Opendoor appears to have stopped using credit from Fortress Investment Group to buy homes in the Fort Worth, Texas area in the fall. But it’s currently using funds from the company to purchase Dallas homes.
Venture capital (VC) and private-equity investors (former or current)
5. Khosla Ventures — where Opendoor co-founder Keith Rabois is a partner — led Opendoor’s Series A funding round and re-upped in all of the startup’s subsequent funding rounds.
Khosla is also an investor in Roofstock.
6. Norwest Venture Partners (NVP) is Wells Fargo’s venture, private equity venture and debt financing arm.
Norwest Venture Partners’ spearheading of Opendoor’s Series D funding round isn’t the only indication that Wells Fargo has taken a deep interest in Opendoor. Property records show that Wells Fargo also services the loans that Deustche Bank has made to Opendoor.
Norwest Venture Partners has also been a big investor in Lending Club.
7. Caffeinated Capital
8. CrunchFund, also has invested in Lend Street Financial, Redfin, Zumper and Airbnb
9. Felicis Ventures, also has invested in PeerStreet and Matterport
10. GGV Capital, also has invested in Airbnb and Houzz
11. Fifth Wall (formerly known as Grey Wolf)
Co-founder Brad Greiwe previously co-founded Blackstone’s Invitation Homes, serving as its chief technology officer. Fifth Wall’s other co-founder, Brendan Wallace, also advised Blackstone’s real estate division, which operates Invitation Homes.
During the housing slump, Invitation Homes snapped up hordes of properties, many at depressed prices, and now owns close to 50,000 U.S. single-family rental homes. Invitation Homes was also the first company to package debt used to buy single-family rentals on a large scale into a new type of mortgage-backed security (MBS).
Fifth Wall has also invested in Roofstock, a platform that lists and sells tenant-occupied single-family rental homes. Roofstock shares a notable number of investors with Opendoor, including Opendoor CEO Eric Wu and early Opendoor investor Khosla Ventures.
A leading real estate and hospitality tech investor, Fifth Wall has bought stakes in short-term rental management service Pillow, Rentlytics, Honest Buildings, RadPad, AssetAvenue and BuildZoom.
12. Lake Star
13. New Enterprise Institute (NEA), also has invested in Houzz, IndiaHomes and Zumper
14. Sherpa Capital, also has invested in Pillow and Airbnb
15. Signatures Capital, also has invested in StreetShares and FundersClub
16. Slow Ventures, also has invested in Nextdoor, Nest, TaskRabbit, Handy and Pillow
17. Solon Mack Capital, also has invested in Reonomy, Common and Kroll Bond Rating Agency
18. SV Angel, also has invested in Roofstock, Airbnb, LendUp, SmartAsset, Porch, FundersClub and Nextdoor
19. SVB Capital
20. Thrive Capital, also has invested in Compass, Hightower and 42Floors
21. True Ventures
High net-worth individual investors (former or current)
22. Aaron Levie, CEO of Box, a content-management system worth close to $2 billion
23. Alexis Ohanian, co-founder of reddit
24. Andy Rankin, co-founder of Exit13 and Hark
25. Bobby Yzdani, founder of VC firm Signatures Capital and has invested in FundersClub
26. Charlie Cheever, founder of Quora, a question-and-answer site
27. Dan Rose, vice-president of partnerships at Facebook and also an investor in Homemade and FundersClub
28. Dave Morin, founder of VC Slow Ventures
29. David King, founder of Green Patch, a Facebook game and widget developer
30. David Sacks, founder of Zenefits
31. Elad Gil, vice president of Twitter, has also invested in Airbnb
32. Eric Kagan, co-founder of VC SierraMaya360 and also has invested in RealCrowd and CompStak
33. Garry Tan, managing partner of Initialized Capital and a former partner at Y Combinator and LendUp
34. Harjeet Tagger, partner at Y Combinator
35. Jeff Seibert, senior director of product at Twitter
36. Jeremy Stoppelman, CEO of Yelp and also has invested in Airbnb
37. Joe Greenstein, co-founder of Flixster
38. Joshua Kushner, founder of Thrive Capital and also has invested in Hightower, 42Floors and Roomarama
Kushner is the brother of President-elect Donald Trump’s son-in-law, Jared Kushner.
39. Karim Elsahy, investor at Kauffman Fellows
40. Kevin Hartz, partner at Founders Fund and also has invested in Homemade and Trulia
41. Max Levchin, CEO of Affirm and also has invested in OfferUp
42. Michael Arrington, general partner at CrunchFund
43. Mike Greenfield, co-founder of AngelVision Investors
44. Mike Hirshland, founder of Resolute.VC
45. Naval Ravikant, co-founder of AngelList and also has invested in Estately (now owned by Realogy)
46. Oliver Thylmann, co-founder of Giant Swarm and has also invested in Compass
47. Om Malik, partner at True Ventures
48. Raymond Tonsing, founder of Caffeinated Capital
49. Rick Marini, co-founder of Dragonfly Partners and the former general manager of digital innovation at Hearst
50. Sam Altman, president of Y Combinator
51. Semil Shah, general partner at Haystack and venture partner at GGV Capital, also has invested in Pillow
52. Trevor Traina, CEO of IfOnly
53. Wayne Chang, director of product strategy at Twitter
Editor’s note: This story has been updated with comments from B2R Finance.
