Opendoor has filled up its venture-funding piggy bank with another $210 million in funding, led by Norwest Venture Partners, with participation from NEA and existing investors Khosla Ventures and GGV Capital.
The latest funding round handed the two-year-old startup a valuation of at least $1 billion, according to sources cited by Bloomberg, and brings its total funding to $320 million.
Already doing business in Phoenix, Dallas and Las Vegas, the company plans to use the cash to expand to 10 more cities next year and wants to be operating in 30 in 2018, according to Forbes.
Opendoor uses automated valuation models (AVMs) to make quick online offers on homes. Sellers who accept the offers can schedule transactions to close in as little as three days after an inspection.
In exchange for this convenience, homeowners pay a service fee ranging anywhere from 6 percent to 12 percent. They also give up an additional 1.5 percent on average in the form of a repair cost credit.
The startup fixes up its acquisitions and then sells them using technology that lets prospective buyers visit its listings anytime between 6 a.m. and 9 p.m. and an online platform for buyers. It’s raised more than $400 million in debt to fund its purchases.
Launched in Phoenix in December 2014, Opendoor provides an inspection report, two-year warranty and money-back guarantee to buyers. And it also offers a “trade-in” option that lets homeowners sell their old home and buy a new one from Opendoor all at once.
In October, the company claimed to have purchased homes from more than 3,300 homeowners, and it currently advertises hundreds of listings spread across Phoenix and Dallas.
Opendoor has tweaked business practices that had previously unsettled some agents, adjusting terms of its money-back guarantee and reducing the hours during which prospective buyers can visit its homes.
Opendoor can move in many directions, such as by offering seller financing or discounts to unrepresented buyers. Unlike Zillow Group, another online powerhouse, Opendoor is capturing commission dollars.