Real estate marketplace Opendoor is going public through a merger with Social Capital Hedosophia II, a special purpose acquisition company (SPAC) associated with investor Chamath Palihapitiya.

Why should we care?
Opendoor’s path to going public is what Palihapitiya calls IPO 2.0, which is how the SPAC partners with “iconic technology companies” and assists in their transition to the public markets. The deal values Opendoor at $4.8B, which is nearly equal to its 2019 revenue. Opendoor buys sellers’ homes directly through its marketplace via algorithm-based pricing, makes repairs and then resells them. The infusion of capital will fuel Opendoor’s expansion as home ownership and e-commerce grow. The past year has seen an increase in the use of SPACs to help companies go public, a vehicle that is faster than the traditional IPO roadshow and an attractive proposition during the pandemic. Time will tell if the SPACs will yield longer-term success for the parties involved. Silicon Valley Bank's Bob Blee recently told CNN that the risks associated with them will probably keep most major unicorns from going public through that route.