Opendoor, the home buying and selling unicorn on the cusp of a public market debut, saw year-over-year revenue decline in the first half of 2020, even as losses narrowed.
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The San Francisco-headquartered company posted a net loss of $118 million on $2 billion in revenue for the first half of 2020, according to a Monday filing with U.S. securities regulators. That’s a decline from the same period last year, when Opendoor had revenue of $2.27 billion and a net loss of $158 million.
The company says the pandemic is largely to blame for slower business earlier this year, noting in the filing that “COVID-19 has adversely affected our business and may continue to adversely affect our business.” In response to the pandemic, the company says it “substantially ceased” purchasing new homes beginning in March, and did not resume buying until May.
The information is contained in a new filing from Social Capital Hedosophia Holdings Corp. II, the publicly traded special purpose acquisition company (SPAC), led by tech investor Chamath Palihapitiya, that announced plans for a merger with Opendoor in mid-September. The deal would set an initial valuation of around $4.8 billion for Opendoor, in one of the largest combinations to date involving a venture-funded technology company and a SPAC.
Six-year-old Opendoor is among the best known of several so-called iBuying platforms for real estate, which seek to streamline and digitize the home buying and selling process. Home sellers can use Opendoor to request a cash offer online and close on a flexible timeline. The company then typically makes repairs and upgrades, and relists the home for sale to a new buyer.
Homebuyers, meanwhile, can use Opendoor’s app to self-tour or virtually tour homes and close on a property. Currently, the company offers title insurance, escrow and home loans, with plans to add more services over time.
Today, Opendoor operates in 21 U.S. metropolitan areas. However, for the first half of 2020, approximately 47 percent of revenue came from its top four metro areas: Phoenix, Dallas, Atlanta and Raleigh.
While the company paused new acquisitions in March, it continued to sell down its stock of existing housing, leading to home inventory of $264 million as of June 30, 2020. compared to inventory of $1.31 billion as of Dec. 31, 2019.
Although the pandemic has led to lower revenues so far in 2020, the company believes going forward that, “COVID-19 has accelerated the adoption of our digital services, as well as created additional tailwinds for housing as people work from home, explore less populated areas and pursue more space.”
For all of 2019, Opendoor had revenue of $4.74 billion and a net loss of $339 million, indicating that sales (and losses) grew over the course of 2019, before contracting in 2020.
The company is a top-funded player in the iBuying space, having raised at least $1.5 billion in venture financing from investors including General Atlantic, Norwest Venture Partners and the Softbank Vision Fund.