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AZ Tech Beat | July 23, 2017

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Opendoor expands to Phoenix market and raises $20M led by GGV Capital

Opendoor expands to Phoenix market and raises $20M led by GGV Capital
Tishin Donkersley

Photo and video contribution by Thomas Hawthorne

The kids are running wild, beds aren’t made, dirty dishes are in the sink, laundry is on floor and your Realtor calls and says she wants to come by and show the house to a potential buyer in 20 minutes. Been there, done that. The act of selling a home has been deemed one of the number one stressors in life and certainly amplified for a family.

Watch our exclusive interview with Eric Wu and a demo of Opendoor.

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San Francisco-based Opendoor, a service that allows homeowners to instantly sell their home online, is looking to help alleviate a seller’s headache by purchasing their home and streamlining a 90-day or more closing process into as little as three days.

Arizona native, angel investor and CEO OpenDoor Eric Wu, expanded the business to Phoenix in December 2014, and today announced a Series B $20 million raise bringing their total funding to $30 million. The funding will be used to expand to new markets, with Phoenix being the first, then Portland and Dallas. Wu said that their Phoenix office currently has 16 employees and plans to add more jobs over the year.

home_profile opendoor

The Series B round was led by GGV Captial along with Khosla Ventures, a prior investor. Glenn Solomon, a managing partner at GGV Capital, who has led investments in Square, Pandora, Zendesk and SuccessFactors, will join the Opendoor board of directors and is participating in the round.

While you might have seen other cash for houses services around the state such as We Buy Ugly Houses with their bright yellow billboards or Cody Buys Houses infomercial, Wu said they are offering sellers “an online experience to greatly simplify their move. The adoption we’ve seen from customers gives us confidence that we’re on the right track.”

Ready to sell? Homeowners simply enter their address online, submit some basic information, and Opendoor provides a real offer to buy their home within minutes. Since they are buying the home directly from the owner, they can close on the seller’s schedule. They also allow sellers 60 days to close and move out, free of charge.

offer_price opendoor

“There is a pent up demand to sell a home, people get locked up, but Opendoor gives them flexibility to leave from their home. People are getting very comfortable with transacting online,” Wu said.

The offer price is determined through a specialized home valuing algorithm and data model that predicts the closing prices of residential real estate and gives the seller a fair and accurate bid within minutes. The offer is 100 percent free to the seller. Opendoor partnered with Realtors to sell the home, and take on the transactional fees and more of the risks so the seller can just take the cash and go.

“There are many risks in the Phoenix home market,” Wu said. “In Phoenix if the home doesn’t sell after being on market for 90 days [there is about] a 25 percent chance that it won’t ever sell.”

opendoor deal

Sample offer at Opendoor.com

Opendoor is currently purchasing at least a home each day in Phoenix, as consumer adoption and demand accelerates for its instant online sales process.

Wu and the Opendoor team set out to change the way people sell their home and eliminate the stress of cleaning the house on a moments notice.

“Dominic and Melissa Santos, one of our early customers, were on the cusp of leaving for their honeymoon but needed to sell their home first.  They decided to use Opendoor and we handled the rest, allowing the couple to go on their trip stress-free,” explains Wu. “These are the types of opportunities we want to continue to create as more homeowners use our service.”

Photos courtesy of Opendoor

Who’s investing?

Series B Investors

GGV Capital, Lead investor

Khosla Ventures

Josh Kushner –  Thrive Capital

Kevin Systrom –  Co-founder, Instagram

Ray Tonsing –  Caffeinated Capital

Resolute Ventures

Semil Shah –  Haystack Fund

Sherpa Ventures

Solomon Mack Capital

 

Series A Investors

Khosla Ventures, Lead Investor

Aaron Levie – Co-founder/CEO, Box

Adam D’Angelo – Co-founder/CEO, Quora

Adam Nash – Co-founder/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/CEO, Blippy

David Sacks – Co-founder, Yammer

Elad Gil – Co-founder/CEO, Color Genomics

Gideon Yu – Former CFO, YouTube and Facebook

Harjeet Taggar, Garry Tan and Alexis Ohanian, Initialized Capital

Jawed Karim – Co-founder, YouTube

Jeremy Stoppelman – Co-founder/CEO, Yelp

Joe Greenstein – Co-founder, Flixster

John Hering – Co-founder, Lookout

Josh Kushner – Thrive Capital

Kevin Hartz – Co-founder/CEO, Eventbrite

Logan Green – Co-founder/CEO, Lyft

Max Levchin – Co-founder, Paypal

Michael Arrington – Crunchfund

Mike Greenfield – Angel investor

Mike Hirshland – Resolute Ventures

Naval Ravikant – Co-founder/CEO of Angelist

Om Malik – True Ventures

Ray Tonsing – Caffeinated Capital

Sam Altman – President of YCombinator

SV Angel

Article has been clarified to accurately reflect the number of jobs at Opendoor