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Opendoor revenue plummets 45% in 2020; iBuyer Looks to Raise $700M

Opendoor CEO Eric Wu (Twitter)

After Covid put Opendoor in a five-month homebuying crisis in 2020, the newly launched company forecasts a 45% decline in annual revenue.

Instant homebuying startups forecast revenues of $ 2.58 billion in 2020, down 45% year-on-year from $ 4.7 billion, a regulatory filing on Tuesday said. We expect to lose between $ 98 million and $ 103 million on an EBITDA basis. This is compared to a net loss of $ 339 million in 2019.

Opendoor shared preliminary treasury with disclosures that it intends to raise more than $ 600 million through an initial public offering just six weeks after it went public through the SPAC.That Will be provided 24 million shares of common stock. Opendoor has not yet set the price of the stock, but estimates its net income based on the closing price of $ 26.12 on January 29th. If the underwriters of Citigroup and Goldman Sachs exercise their shares, the company could raise just under $ 700 million.

Opendoor currently operates in 21 markets in the United States. In 2019, we sold nearly 19,000 homes. To Opendoor said it plans to invest in existing and new markets and will increase working capital. “The main purpose of this offering is to increase capitalization and financial flexibility,” says Filing. “IIn addition, we plan to continue investing in 2021 to double the market we serve. “

Like other iBuyers, Opendoor suspended home purchases in March, when the pandemic plunged the home market. Between February and July 2020, Opendoor reduced inventories from more than $ 1 billion to $ 172 million, according to previous financial reports.

Opendoor revenue was $ 2.3 billion during the first nine months of 2020, compared to $ 3.5 billion during the same period in 2019. Net losses decreased from $ 247.4 million to $ 198.9 million.

Guided by CEO Eric Wu, Opendoor buys a home from an owner who wants the certainty of a quick closure. After making minor improvements, it aims to sell at a premium and also make money with ancillary services.

The San Francisco-based startup was launched in December after merging with a blank check company sponsored by Chamat Palihapitiya.Opendoor valuations soared prior to trading $ 18 billion, about Three times the $ 5 billion corporate value of September when the deal was signed Paris Hapitiya.. The shares closed at $ 31.25 per share on December 21st.

Stocks have fallen in the last six weeks. Opendoor’s share price closed at $ 28.47 per share on Tuesday, rising from $ 26.25 the day before, with market capitalization Over $ 15 billion.

After its release, Opendoor had $ 1 billion in cash. However, home buying is a very capital-intensive business, and startups may be trying to increase market share based on their momentum and financial market liquidity. Earlier on Tuesday, brokerage giant Realogy announced the offering of $ 200 million in senior notes in addition to the $ 1 billion raised in the last 12 months.

Opendoor forecasts revenue of $ 10 billion by 2023. By gaining 4% of the US housing market, it could become a $ 50 billion company.

Opendoor revenue plummets 45% in 2020; iBuyer Looks to Raise $700M Source link Opendoor revenue plummets 45% in 2020; iBuyer Looks to Raise $700M

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