Uh Oh for Real Estate Agents – Opendoor Snags $325M Series E Round


By Cindy Taylor/Publisher

This past week’s BIG fintech VC story was OpenDoor.

OpenDoor is a REtech, as we like to call them, that is disrupting the real estate industry, and is it ever going to disrupt things for realtors, too.

The firm just secured a $325M funding round from General Atlantic, Access Technology Ventures and Lennar Corporation.  Pay special attention to that last investor.  Lennar, based in Miami, is the largest home construction company in the U.S. and no doubt more than a little eager to see their realtor commissions reduced on home sales. The firm has raised a total of  $645 million in equity and $1.5 billion in debt to date.  Admittedly, those are VERY LARGE numbers, and we always have a question as to where all that money is going.  No doubt a large part is allocated to marketing, as we’ve seen lots of television spots for them, at least in the Atlanta market, of late.  Also, of course, that debt round is being used for the acquisition of the real estate properties it is buying.

With the fresh round of capital, the firm is stating that it intends to expand to a total of 50 US markets by the end of 2020, up from the current 10 it serves now, which include:

Phoenix, AZ
Dallas Fort-Worth, TX
San Antonio, TX
Las Vegas, NV
Atlanta, GA
Charlotte, NC
Raleigh, NC
Orlando, FL
Nashville, TN (NEW)
Tampa, FL (NEW)

Ramping up their market coverage by a multiple of 5 within 2 years seems a VERY ambitious plan, and yet this is a gamechanger fintech firm.

The firm’s differentiation is stated on their website as follows:

“Traditional home sale

  • List on the market for an average 50 days until closing
  • Risk of buyer financing falling through
  • Hidden fees and upfront costs

House flipper

  • Sell instantly, but well below market value
  • For distressed properties needing major repairs
  • Home is resold for a large profit


  • Close in just a few days at a competitive price
  • No listing, showings, staging or stress
  • Transparent fees and pricing”

One of the most unique features is the ability to buy and sell a home very quickly.  While the fees are 6.5% on a sale, the transaction can close within 5-60 days, and doesn’t require realtor showings, home staging, overlap on closings of other properties, etc.  In short, it’s a HUGE time-saver and Opendoor also takes on the additional responsibility of finding another home-buyer.

So, it’s easy to see why – if the offer comes in at a fair value – owners are willing to go this route.  And that’s what makes it a game-changing fintech.

In the words of Lorie Greiner from SHARK TANK, either it’s a “hero or a zero”.  This looks to be the former…..IF they can stop blowing through all that VC cash and get to profitability in short order.  That is yet to be seen.