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Social Capital CEO Chamath Palihapitiya has found his next investment on his quest to become the Warren Buffett of tech investing.
Opendoor Labs, a homebuying startup backed by firms including SoftBank and Khosla Ventures, plans to go public via merger with Palihapitiya’s second blank-check company in a deal that values the company at $4.8 billion, the duo announced Tuesday.
As part of the deal with Social Capital Hedosophia Holdings Corp. II, Opendoor will receive $1 billion in cash, which includes funding from the blank-check company itself and some $600 million from investors including Black Rock and the Healthcare of Ontario Pension Plan. The company was last valued at $3.8 billion in early 2019.
What’s particularly interesting about Opendoor: The company specializes in so-called instant buying, a practice that has grown in popularity among digital real-estate companies. In contrast to real-estate marketplaces where a company merely lists a property, companies using the iBuying model seek to simplify the process by buying the property themselves and reselling it for a profit—but such players are especially exposed during a downturn.
Opendoor struggled in the early days of the pandemic, laying off 600 employees, or 35% of its workforce, in April as consumers stayed at home.
At the same time, digital real-estate companies have held up surprisingly well despite an early dip in the pandemic. Consumers continue to buy homes—especially online—in a socially-distanced society. While it’s unclear how exactly Opendoor is now faring financially, shares of competitors Redfin and Zillow—which have also jumped into the iBuying market, though to a lesser degree—have breached all-time highs. But both, notably, have sought to raise additional funding, with Redfin selling some $110 million of stock to Durable Capital Partners in March and Zillow announcing plans to raise $1 billion through stock and convertible debt offerings.
Opendoor’s raise is a sign of the times. While the first Social Capital Hedosophia took two years to announce an acquiree, Virgin Galactic, Social Capital Hedosophia II priced in late April and found its target in about five months.
EUROPE’S BIGGEST FINTECH UNICORN: Buy-now-pay-later startup Klarna is now Europe’s largest fintech unicorn after raising $650 million in a funding round led by Silver Lake. Touting a valuation of $10.7 billion, the Swedish startup is now valued more than competitor Revolut, which was last at about $5.5 billion. GIC, BlackRock, and HMI also participated in the round.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Grab, a Southeast Asian ride-hailing company, is in talks to sell $3 billion in stock to the Alibaba Group. Alibaba may also spend a portion of that to acquire Grab shares owned by Uber Technologies. Read more.
- dLocal, a Uruguay-based payments fintech, raised $200 million in funding and is now valued at $1.2 billion. General Atlantic led the round and was joined by investors including Addition, Endeavor Catalyst and Zeev Ventures.
- Airtable, a San Francisco, Calif.-based workplace productivity tool, raised $185 million in Series D funding valuing the company at $2.5 billion. Thrive Capital led the round and was joined by investors including Benchmark, Coatue, Caffeinated Capital, CRV, and D1 Capital.
- Escient Pharmaceuticals, a San Diego, Calif.-based maker developer of G Protein-Coupled Receptor-targeted drugs, raised $77.5 million in Series B funding. Sanofi Ventures and Cowen Healthcare Investments led the round and were joined by investors including Redmile Group and Perceptive Advisors.
- Devo Technology, a Cambridge, Mass.-based security analytics company, raised $60 million in Series D funding. Georgian led the round and was joined by investors including Bessemer Venture Partners and Insight Partners.
- Volansi, a San Francisco-based drone delivery service, raised $50 million in Series B funding. Icon Ventures led the round and was joined by investors including Lightspeed Venture Partners, YCombinator, Harpoon Ventures, and Merck Global Health Innovation Fund.
- Hexagon Bio, a Menlo Park, Calif.-based biotechnology company, raised $47 million in Series A funding. The Column Group led the round and was joined by investors including 8VC and Two Sigma Ventures.
- Keepit, a Danish cloud-based backup-as-a-service solution, raised $30 million from One Peak.
- GHGSat, a Montreal, Canada-based maker of greenhouse gas monitoring technology, raised $30 million in its first tranche of Series B funding. Government of Québec’s Investissement Québec led the round and was joined by investors including OGCI Climate Investments, Business Development Bank of Canada, Fonds de solidarité des travailleurs du Québec, Space Angels, and Schlumberger.
- Medigate, a New York-based IoT and medical device security company, raised $30 million in Series B funding. Partech led the round and was joined by investors including YL Ventures, U.S. Venture Partners, Blumberg Capital, and Maor Investments.
- Seegrid Corporation, a Pittsburgh, Pa.-based maker of self-driving industrial vehicles for material handling, raised $27 million in funding adding to a $25 million round announced earlier this year. The investors were not disclosed.
- Brightseed, a San Francisco-based maker of A.I. for phytonutrient discovery, raised $27 million. Lewis & Clark AgriFood led the round.
- Hungry Harvest, a Baltimore, Md.-based rescued produce delivery service, raised $13.7 million in Series A funding. Creadev led the round and was joined by investors including Danone Manifesto Ventures, Quadia and Maywic Select Investments.
- BrandTotal, a New York-based brand marketing analytics company, raised $12 million in Series B funding. INcapital Ventures led the round and was joined by investors including Maor Investments, Glilot Capital Partners, Flint Capital, KDC Media Fund, and FJ Labs.
- Courier, a San Francisco-based API platform for adding multichannel user notifications to applications, raised $10.1 million in Series A funding. Bessemer Venture Partners led the round and was joined by investors including Matrix Partners, Twilio, and Slack Fund. Read more.
- Totient, a Cambridge, Mass.-based A.I.-driven drug discovery company, raised $10 million in seed funding. Investors included Mission BioCapital, Sands Capital, Viva Biotech, Kaitai Capital, Tau Ventures, and Jonathan Milner.
- Sternum, a Tel Aviv-based IoT cybersecurity company, raised $6.5 million in Series A funding. Square Peg led the round and was joined by investors including Merle Hinrich and btov.
- ShoppingGives, a Chicago-based platform that offers social impact and donation processing for retailers, raised $5.5 million in Seed funding. Caffeinated Capital led the round and was joined by investors including Tuesday Capital, SciFi VC, Background Capital, Red Dog Capital, 20VC, Global Founders Capital, Big Future Fund, Rogue Capital, Night Capital, Manresa Ventures, and Sugar Capital.
- Incentify, a Los Angeles-based enterprise tax credits and incentives platform, raised $4.3 million in funding. Ryan LLC led the round.
- BrightHire, a New York-based platform for hiring, raised $3 million in funding. Flybridge Capital led the round and was joined by investors including Ground Up Ventures, RTP Ventures, J Ventures, Silas Capital, and Haystack.
- ZenSports, a mobile peer-to-peer sports betting marketplace, raised $1.5 million in Seed funding. Investors included LAUNCH and Cube Magic Gaming.
- Sentinel, an Estonia-based startup developing a detection platform for deepfakes, raised $1.4 million in seed funding. Investors include Jaan Tallinn (Skype), Taavet Hinrikus (TransferWise), Ragnar Sass & Martin Henk (Pipedrive), and United Angels VC. Read more.
- HR DataHub, a London-based HR data benchmarking platform, raised £1 million in seed funding. the Angel CoFund led the round.
PRIVATE EQUITY
- Carlyle and SoftBank have both expressed interest in Reliance Retail Ventures, the India-based retail business backed by Reliance Industries. The two have been put on the waiting list though amid a surge in investor interest. Read more.
- Blackstone Group is in talks to acquire 40 mobile home parks from Summit Communities for about $550 million, per Bloomberg. Read more.
- GardaWorld, backed by BC Partners, offered to acquire G4S (LON:GFS), a U.K.-based security firm, for 2.95 billion pounds (US$3.80 billion), per Reuters. GS4 rejected the bid. Read more.
- Bettera Brands, a portfolio company of Highlander Partners, acquired Nutravail, a Chantilly, Via-based manufacturer of health and wellness food products. Financial terms weren't disclosed.
- Highlander Partners acquired Hilo Nutrition, a Columbus, Oh.-based maker of nutritional gummies. Financial terms weren't disclosed.
- An affiliate of Peak Rock Capital acquired Paragon Healthcare, an operator of injectable and infusible centers. Financial terms weren't disclosed.
- GI Partners made a majority investment in American Residential Services, a Memphis, Tenn.-based provider of residential heating, ventilation, air conditioning. Financial terms weren't disclosed.
- Osceola Capital recapped Industry Services Company, a provider of industrial maintenance services. Financial terms weren't disclosed.
OTHERS
- Verizon Communications agreed to buy TracFone Wireless, a Miami-based prepaid mobile phone provider, from America Movil SAB for $6.3 billion in cash and stock.
- Merck & Co. plans to take an equity stake in Seattle Genetics, a cancer drugs maker, and make a series of deals for two of its cancer drugs. Merck could pay as much as $4.5 billion. Read more.
- Red Ventures plans to acquire CNET Media Group, a portfolio of media brands including CNET and Chowhound, from ViacomCBS for $500 million.
- BioNTech SE (Nasdaq: BNTX) received a grant of up to €375 million from the German Federal Ministry of Education and Research for its Covid-19 efforts.
- UBS and Credit Suisse, two European banking giants, are exploring a merger. Read more.
- SafetyCulture acquired EdApp, an Australia-based mobile learning startup, for $29 million.
- Walmart plans to pursue a deal with TikTok, the ByteDance-owned social media app, even though Oracle is currently leading a potential partnership. Read more.
BREAKUPS AND BANKRUPTCIES
- Town Sports International, the owner of the New York Sports Clubs gyms, filed for Chapter 11 bankruptcy. Read more.
- GNC Holdings, a U.S.-based vitamins retailer, cancelled its bankruptcy and plans to proceed with a sale to China’s Harbin Pharmaceutical Group Co. Financial terms weren't disclosed.
EXITS
- SoftBank Group will raise about 1.2 trillion yen ($10.4 billion) by selling a third of SoftBank Corp., its domestic wireless arm. Read more.
- Hedge fund billionaire Steve Cohen agreed to acquire the New York Mets baseball team from Sterling Equities. Reports say the deal values the club at about $2.5 billion. Read more.
- Wren House agreed to acquire i3 Broadband, an East Peoria, Ill.-based provider of internet and cable services, from Seaport Capital and Countrywide Broadband. Financial terms weren't disclosed.
IPOs
- Allegro, a Polish ecommerce platform, is seeking to raise $266 million for its Warsaw IPO. Allegro, whose backers include Cinven, Permira and Mid Europa Partners, is seeking a valuation of about $14.2 billion. Read more.
SPAC
- AEA Investors and Bridges Fund Management plan to raise $400 million in a new blank check company focused on socially responsible investing. Read more.
- Sports Entertainment Acquisition, a blank check company targeting the sports and entertainment sectors, plans to raise $350 million in an IPO. Eric Grubman (former Chairman of On Location Experiences), and John Collins (former CEO of OLE) lead the business. Read more.
- Software Acquisition Group II, a blank check company seeking a software acquisition, raised $150 million. Read more.
F+FS
- Clayton, Dubilier & Rice raised over $9.8 billion for its eleventh fund. Read more.
- GCM Grosvenor raised $893 million for its for impact fund.
PEOPLE
- Apollo Global Management named Marc Becker and Joanna Reiss as co-leads for Apollo Impact, a new platform dedicated to impact investing.
- BW Forsyth Partners, Barry-Wehmiller’s hybrid equity firm, promoted Ryan Gable to managing partner.
