An online real estate marketplace cofounded by WashU Olin alum JD Ross will gain a $1 billion infusion in an acquisition that values the company at nearly $5 billion.
Ross, BSBA ’12, cofounded Opendoor in 2014. He was responsible for building the prototype of its online platform and worked until 2018 as the company’s head of product development, where he built out the product development team.
Opendoor is an online home marketplace that offers homeowners a means to sell their houses instantly, without the heartache of weeks or months on the real estate market. Today, Ross is a partner with San Francisco-based venture capital/private equity firm Atomic.
“I want to take a quick moment to share deep appreciation for everyone who put their heart into getting Opendoor to where it is,” Ross said in a tweet posted on Wednesday, noting that his appreciation extended to “teammates and investors who took a leap of faith with your careers, and the customers who took a bet on a new concept and guided us along the way.”
CNBC reported the acquisition of Opendoor on Tuesday, interviewing Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia II. The deal essentially rolls Opendoor into Social Capital, his publicly traded “special purpose acquisition company.” Proceeds from that firm’s April IPO, along with a $600 million infusion from a group of investors that includes Palihapitiya and funds managed by BlackRock, will total just over $1 billion for Opendoor in the acquisition.
“The company is transforming the $1.6 trillion residential real estate market by combining superior user experience, streamlined operations and machine learning to create a seamless digital experience,” Palihapitiya told CNBC.
CNBC reported that the $4.8 billion valuation for Opendoor is nearly equal to the company’s 2019 revenue. Opendoor operates in 21 markets and says it sold more than 18,000 homes last year. “Homeowners get a quote, through an algorithm, and can sell their houses directly to the company,” CNBC reported. “Opendoor may make some fixes and then put the house on the market to sell. The spread between what the home is bought for and sold is a part of how Opendoor generates revenue.”
“If you tell me there’s a problem to solve, I love that,” Ross told Olin Business five years ago.