Opendoor is going public through a merger with blank check company Social Capital Hedosophia Holdings Corp. II in a deal that will give the residential real estate startup an enterprise value of $4.8 billion
Shares of Social Capital were up 22.6% to $16.
The deal will provide as much as $1 billion in cash, including up to $414 million in cash held in the trust account of Social Capital Hedosophia Holdings Corp. II, which is headed by founder and CEO Chamath Palihapitiya.
The transaction is also being supported by a $600 million through a PIPE, or private investment in public equity, with $200 million from entities affiliated with Social Capital, including $100 million from Palihapitiya, $58 million from Hedosophia, and the remainder from existing Opendoor shareholders, Access Industries and Lennar, along with Opendoor management.
Upon completion of the transaction, Opendoor said it expects to have up to $1.5 billion in cash on its balance sheet to fund operations and support new and existing growth initiatives.
Opendoor currently operates in 21 markets across the U.S., including Phoenix, Dallas-Fort Worth, Raleigh-Durham, Atlanta and Orlando.
Since its founding, the company said, Opendoor has served more than 80,000 customers and sold more than $10 billion of homes. In 2019, the company sold more than 18,000 homes, generating $4.7 billion in revenue.
The pandemic forced the company to pause operations and in April Opendoor announced plans to lay off 35% of its staff.
The transaction is the latest example of a startup going public through a SPAC, blank check company.
Earlier this month, QuantumScape, an electric vehicle battery supplier backed by Bill Gates and Volkswagen, said it would go public through a merger with special purpose acquisition company Kensington Capital Acquisition.
Skillz, a mobile-gaming company, said it would go public through a merger with Flying Eagle Acquisition Corp.