Business_news Social Capital SPAC surges 25% after it confirms tie-up with Opendoor, Chamath Palihapitiya calls it his ‘next big 10x idea’ (IPOB)

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  • Social Capital Hedosophia Holdings Corp. II, a SPAC led by billionaire investor Chamath Palihapitiya, surged 25% on Tuesday after it confirmed it was merging with Opendoor.
  • Opendoor is a property technology company that directly buys homes from sellers, makes necessary repairs to the homes, and then resells them.
  • The transaction values Opendoor at an enterprise value of $4.8 billion, and will provide up to $1 billion in proceeds to fund Opendoor’s growth initiatives.
  • “This is my next big 10x idea,” Palihapitiya said in a tweet.
  • Visit business Insider’s homepage for more stories.

It’s official. Afterreports surfaced last weekthat Opendoor was in talks withSocial Capital Hedosophia Holdings Corp. II, a SPAC led by billionaire investor Chamath Palihapitiya, both parties confirmed the tie-up today.

In a deal that values Opendoor at an enterprise value of $4.8 billion, the property technology company will go public via a merger with Social Capital Hedosophia Holdings Corp. II. The deal will provide up to $1 billion in proceeds to help fund Opendoor’s growth initiatives.

Opendoor is a property technology company that directly buys homes from sellers, makes improvements to the homes, and then resells them.

The convenience afforded to home owners who sell to Opendoor is a quick three-day process of receiving an all-cash offer on their home, according to Palihapitiya, among other things. 

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Shares of Social Capital Hedosophia Corp. II surged as much as 25% to $16.36 in Tuesday morning trades.

In an interview with CNBC, Palihapitiya highlighted that real estate is the largest market that has yet to be disrupted by online technologies, and that the COVID-19 pandemic has only heightened the need to move the home buying and selling process online.

Palihapitiya estimated that if Opendoor is able to capture 4% of its target market, that would equate to more than $50 billion in revenue.

“This is my next big 10x idea,” Palihapitiya said in a tweet.

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