It’s official: Keith Rabois’s new startup, Opendoor, has closed its first round of funding with $9.95 million.
The news follows a couple months of pre-launch hype. In April, Rabois announced that he would be starting a new venture in the real estate realm to help people sell their houses faster. The company quietly filed a legal document in late May, in the process revealing the company’s name and Rabois’ co-founder, Eric Wu, as VentureBeat first reported.
Now the fledgling startup is confirming its existence and its funding.
"We have to value the home, sight unseen. You can put in your address and we tell you what it's worth instantly. And we'll want to buy it from you for that price,” Rabois said to VentureBeat back in April.
The company will analyze loads of data to help home sellers set optimal prices and then sell their homes to the company immediately, in just a few clicks. Opendoor then sells the house to a new homebuyer, presumably pocketing any markup as profit.
The appeal is the instant, hassle-free sale which allows sellers to move on with their lives. By contrast, Opendoor says most home sales typically take more than 90 days.
“The idea is to give sellers some certainty around how much equity they have” from their homes, said cofounder Eric Wu to VentureBeat. “Not everyone wants the speed [we will provide], but they certainly want the equity,” he added. This is especially important for people who are moving to a different area and want to purchase a new home as soon as possible, yet all the capital they would need for a down payment is locked up in their current home. Opendoor is freeing that capital so they can use it to make a new purchase more quickly, according to Wu.
Wu declined to share specifics about the product or the process, however.
According to the previous incarnation of Opendoor’s website, it will "work with sellers directly to purchase home[s]," "work with local partners to rehab, maintain, and improve our portfolio of properties," and "partner with local brokers and Realtors to market, list on [the multiple listing service], and resell to retail buyers and investors.”
And while the business model should require a tremendous amount of capital in order to purchase homesellers’ houses, and to do so quickly, the money from this round of funding is not intended for that. “We have partners to help with that,” said Wu, in regards to purchasing the homes. These partners, we’d guess, are likely be banks or other financial institutions with vast amounts of capital.
Instead, this round of funding will go towards investing into its data science team, the models it will build for its operation, and other personnel needs.
Wu also declined to share a specific launch date, although he did say that Opendoor is “looking to go live in a few markets very soon,” and they will all be in the U.S., as Rabois originally told VentureBeat in April.
The founding team is comprised of Khosla Ventures partner Keith Rabois, former Trulia head of geo Eric Wu, former Square data science lead Ian Wong, and former Addepar vice president of product JD Ross.
Khosla Ventures led the round, with additional investors including Max Levchin, David Sacks, Naval Ravikant, Aaron Levie, Dave Morin, Elad Gil, Sam Altman, Adam D’Angelo, and many more.
