Property Tech Startup Opendoor Nears $5B SPAC Merger Deal To Go Public: Report

Property technology startup Opendoor is in advanced discussions with billionaire Chamath Palihapitiya's blank-check company to go public in a deal that could be valued at near $5 billion, Bloomberg reported Thursday.

What Happened: Social Capital Hedosophia Holdings Corp. II IPOB is in talks with investors to raise fresh equity to fund the merger with Opendoor, people familiar with the matter told Bloomberg.

The deal could reportedly be announced in the coming weeks.

Opendoor buys homes online and sells them after making minor improvements. The company was valued at $3.8 billion as of its March 2019 fundraising round, according to Bloomberg.

Notable investors in the Eric Wu-led company include Softbank Group Corp’s SFTBY Vision Fund, General Atlantic, and Khosla Ventures.

Why It Matters: Palihapitiya and veteran investor Ian Osborne partnered to form Social Capital II, which began trading in April, Bloomberg noted. The company’s shares have risen 15.7% this month.

Last year, Richard Branson’s Virgin Galactic Holdings Inc SPCE merged with the forerunner of Social Capital and became the world’s first publicly traded commercial human spaceflight company.

Blank-check companies or special purpose acquisition companies are in the limelight as 91 such companies have raised nearly $36 billion so far this year, as per data from SPACInsider. 

Recent announcements include electric vehicle company Canoo, which is scheduled to go public later in 2020 in a reverse merger with Hennessy Capital Acquisition Corp IV HCAC.

Fisker Inc, also an EV firm, plans a merger deal with Spartan Energy SPAQ next month.

Price Action: Social Capital shares traded nearly 16.4% higher at $14.45 in the after-hours session on Thursday.