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Serious money, big names get behind PayPal vet’s big-data house-flipping startup

By February 26, 2015 No Comments

Opendoor — the “big-data house-flipping startup” that’s out to shake up real estate by making instant offers to homeowners who want to sell their homes quickly online — has landed another $20 million in funding, bringing the total raised to date to $30 million.

Founded by former PayPal and Square exec Keith Rabois, Opendoor says it’s now purchasing “at least a home each day” in Phoenix, where it launched last year, and is preparing to expand into Portland, Oregon, and Dallas, Texas.

When homeowners enter their address and submit some basic information online, Opendoor’s valuation model provides “a real offer to buy their home” within minutes, the company says. Nearly the entire transaction is handled online, with sellers closing and receiving funding within as little as three days.

Sellers pay a 5.5 percent “convenience charge” and take care of most closing costs. They also accept a discounted price on their home, which Opendoor says helps cover the risk that it won’t be able to flip every home it buys at a profit.

“Since launch, our offers have continually improved in accuracy as we gather more data, reduce costs and scale operationally,” Opendoor CEO Eric Wu said.

Wu said real estate agents “are an important and trusted part of the home shopping experience for many buyers. We are offering a standard buyer broker commission for any of our homes.”

The latest funding round was led by GGV Capital with participation by a prior investor, Khosla Ventures. GGV Capital Managing Partner Glenn Solomon, who has led investments in Square, Pandora, Zendesk and SuccessFactors, will take a seat on Opendoor’s board of directors.

With $2.2 billion under management across five funds, GGV Capital’s portfolio includes Alibaba, Buddy Media, Didi Taxi, Domo, Flipboard, HotelTonight, Houzz, Misfit, Pandora Media, Quixey, SoundCloud, Square, SuccessFactors, Wish and Zendesk.

“Opendoor epitomizes what we look for at GGV: a great team going after a big market with a unique approach,” Solomon said in a statement. “The team has made incredible progress since the company’s founding, applying technology and a new approach to transform the frustrating home selling process to one that’s simple, certain and fast.”

Opendoor has not only landed some serious venture capital, but the list of people betting on the company’s success reads like a who’s who of the tech world.

In addition to GGV and Khosla Ventures, investors in the latest “Series B” funding round were Josh Kushner, Thrive Capital; Kevin Systrom, co-founder, Instagram; Ray Tonsing, Caffeinated Capital; Resolute Ventures; Semil Shah, Haystack Fund; Sherpa Ventures; and Solomon Mack Capital.

Previous “Series A” investors included Aaron Levie, co-founder and CEO, Box; Adam D’Angelo, co-founder and CEO, Quora; Adam Nash, co-founder and CEO, Wealthfront; Aydin Senkut, Felicis Ventures; Charlie Cheever, co-founder, Quora; Dan Rose, vice president, Facebook; Dave Morin, co-founder, Path; David King, co-founder and CEO, Blippy; David Sacks, co-founder, Yammer; Elad Gil, co-founder and CEO, Color Genomics; YouTube and Facebook vet Gideon Yu; Harjeet Taggar, Garry Tan and Alexis Ohanian, Initialized Capital; Jawed Karim, co-founder, YouTube; Jeremy Stoppelman, co-founder and CEO, Yelp; Joe Greenstein, co-founder, Flixster; John Hering, co-founder, Lookout; Josh Kushner, Thrive Capital; Kevin Hartz, co-founder and CEO, Eventbrite; Logan Green, co-founder and CEO, Lyft; Max Levchin, co-founder, Paypal; Michael Arrington, Crunchfund; Mike Greenfield, angel investor; Mike Hirshland, Resolute Ventures; Naval Ravikant, co-founder and CEO of Angelist; Om Malik, True Ventures; Ray Tonsing, Caffeinated Capital; Sam Altman, president of YCombinator; SV Angel.

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