Opendoor, a five-year-old iBuyer industry disruptor, just announced its latest additional $300M round of funding to bring its total reported valuation to $3.8B. This $3.8B reported valuation makes the company worth three times that of Realology now valued at a $1.3B market cap. (Only Compass, valued at $4.4B, and Zillow, valued in the neighborhood of $7.5B, are “worth” more.) Opendoor also has a reported $1B in equity.
Additionally, Opendoor’s spokesperson, Crista Culver said that the company is now buying and selling some 3,000 homes/month in its current 23 markets country-wide and servicing some 36,000 customers. Culver also stressed Opendoor’s goal of being operational in 50 markets by 2020.
Opendoor currently works with its in-house agents to buy the homes it buys. It also works with third-party agents to help buyers buy homes via its recently acquired discount brokerage, OpenListings. Opendoor resells its homes with both in-house and third party agents, pays agents for listing referrals, pays co-op commissions to buyer’s agents and earns referral fees for sending seller leads (owners of homes the company does not want to buy) to other agents. Opendoor also uses OpenListings to serve homebuyers with listings outside of the homes it owns to strengthen its own trade-in leverage.
Eric Wu, CEO of Opendoor, has always been clear about his vision for this company. Wu sees a future in which “…everyone uses Opendoor to buy and sell their homes in a frictionless transaction…a notion that in almost any category, things should be self-service, on-demand.”
Already with its own mortgage services business under the Opendoor automated umbrella, Wu is considering such moving and storage services like Clutter (which just raised $200M in funding) and home maintenance services such as Setter. The more Opendoor can offer customers a one-stop-shopping-service for selling, buying, moving, renovating, maintaining, etc. a home, the better.
To accomplish such one-stop-home selling-buying-moving-etc. services, this latest round of financing may come in handy to Wu and Opendoor. As Opendoor acquires more such services and as Opendoor’s focus on automation only intensifies as Wu’s top priority vision to “reinvent the buyer experience” becomes reality, Wu sees the role of a real estate agent shifting away from being what he calls a “project manager” who coordinates all of these services and referrals for the customer to being an “advisor” to the customer as automation takes over the coordination of services.
Will real estate agents reinvent themselves and embrace the role of advisor in Wu’s vision as Opendoor automates as much as possible in Wu’s quest to reinvent the homebuyer’s and seller’s experience? Only time will tell.
