Home / Business / Social Capital SPAC led by billionaire investor Chamath Palihapitiya in advanced talks to merge with Opendoor, report says

Social Capital SPAC led by billionaire investor Chamath Palihapitiya in advanced talks to merge with Opendoor, report says



FILE PHOTO: Chamath Palihapitiya, founder and CEO of Social Capital, presents during the 2018 Sohn Investment Conference in New York City, United States, April 23, 2018. REUTERS / Brendan McDermid / File photo
  • Opendoor is in advanced talks to go public via a merger with Social Capital Hedosophia Holdings Corp. II, a “blank check” company, or SPAC, led by billionaire investor Chamath Palihapitiya, Bloomberg reported Thursday.
  • Opendoor is a real estate technology company that buys homes directly from sellers, makes some home improvements and then resells them.
  • While the transaction is not yet finalized and the deal may fall apart, Bloomberg said, investors are still offering SPAC shares as high as 7% higher in Friday̵
    7;s trading.
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Opendoor, a real estate technology firm, is in advanced talks to go public via a merger with Social Capital Hedosophia Holdings Corp. II, Bloomberg reported Thursday.

Social Capital is a “blank check” company, or SPAC, that has been looking for a technology company to acquire since it began operating in April. SPAC is led by billionaire investor Chamath Palihapitiya.

This is not the first Palihapitiya rodeo in the SPAC world. Its first foray was in 2019, when space exploration company Virgin Galactic went public via a merger with a Palihapitiya-led SPAC.

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Opendoor runs a business similar to Zillow’s relatively new home purchase program. The San Francisco-based company buys homes directly from vendors, makes minor repairs to homes, and then resells them for profit.

Some of the home seller benefits include less commissions for home sales and greater flexibility regarding moving and closing dates, according to its website.

In its latest funding round in 2019, Opendoor was valued at $ 3.8 billion. According to Bloomberg, Opendoor would be worth around $ 5 billion in a deal with Social Capital.

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A potential deal with Opendoor could be good timing given its exposure to the real estate sector. In recent months, following the onset of the COVID-19 pandemic, the real estate sector has seen a business boom as city dwellers try to escape to the suburbs after months of housekeeping.

The deal is expected to be announced in the coming weeks, Bloomberg said. Shares of Social Capital Hedosophia Holdings Corp. II were up 7% in trading on Friday.

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