Ten days ago, two ambitious real estate tech companies who are recipients of Saudi Arabian money, Opendoor and Compass, remained silent when Inman asked them about the controversy surrounding the death of Saudi journalist Jamal Khashoggi, who disappeared earlier in October and whom Turkish intelligence suggests was killed in the Saudi embassy by Saudi operatives, with the knowledge or direction of Saudi Crown Prince Mohammed bin Salman. The Crown Prince has denied responsibility but Saudi Arabia admits the journalist was killed during an interrogation gone wrong.
Opendoor and Compass each recently accepted $400 million in funding ($800 million total) from the SoftBank Vision Fund, the largest tech fund of its kind in the world, half of its total $93 billion which is financed by Saudi Arabia’s sovereign wealth fund.
Now, influential leaders at Compass and Opendoor have since weighed in on their ties to Saudi Arabia and the international outcry over Khashoggi’s disappearance and killing.
Compass CEO Robert Reffkin (pictured above at left) provided the following statement to Inman today through an email sent by a spokesperson:
“SoftBank has been a great partner to us and we look forward to continuing to grow with them. Of course, the death of Jamal Khashoggi is beyond disturbing because the freedom and safety of the press is something that is incredibly important to me.”
Opendoor co-founder JD Ross responded to the controversy on stage at Bloomberg’s “Sooner Than You Think” technology summit in Brooklyn last week.
Bloomberg moderator Julie Verhage asked Ross: “You guys recently had a large round a couple months ago, and SoftBank was one that was involved, and with all the Saudi news recently, I know it’s been sort of a controversial topic. You know, has that been a concern for you guys at all? Or what are the feelings internally on that?
Ross provided the following response:
“I think that that’s a hard question. It’s the one everyone likes to not get asked. I think that what Saudi Arabia allegedly did was incredibly barbaric, right? And I think we’re all humanists individually. I think it’s easy to not just denounce that but to say that’s completely illiberal and against everything we stand for if it’s true.
Now even hold that view and also say, ‘yes, two layers upstream from us, they invested in a fund,’ and that’s probably true for any public company and [UNCLEAR] company.
The hope is that this kind of controversy leads to changes in Saudi Arabia, and that the capital becomes, you know, better in that way. I think they’re sort of separate topics. One is capital and one is humanism and human rights, and I’m on the side of focusing on the human rights side.”
Opendoor did not respond by press time to a request from Inman to clarify Ross’ point about separating the issue of Saudi capital from the issue of alleged Saudi human rights abuses.
Neither Opendoor nor Compass have announced plans to take any action in light of alleged Saudi conduct, with Reffkin seeming to indicate that its relationship with SoftBank remains fully intact.
After bin Salman reportedly denied knowledge of Khashoggi’s disappearance, the Saudi government has consequently said Khashoggi was accidentally strangled to death inside the Saudi consulate in Istanbul during an attempt to convince the columnist to come to Saudi Arabia — an account that U.S. President Donald Trump recently called the “worst cover-up ever.”
Some business leaders pulled out of an investment conference being hosted in Riyadh, Saudi Arabia this week, following reports of Khashoggi’s death. They reportedly include SoftBank CEO Masayoshi Son, though a representative of the Softbank Vision Fund still spoke on a panel at the conference.
If the Vision Fund becomes politically radioactive, it could complicate the growth plans of Compass and Opendoor, among other Vision Fund-backed startups. The Vision Fund has touted patience and long-term commitment to its portfolio companies (Son has said he thinks in terms of a “300-year-plan”), and Compass and Opendoor may have hoped to turn to SoftBank for more cash in the future — and they still might.
