Future City: Opendoor comes home

Coming home

Opendoor, the largest iBuyer in the U.S., has flipped tens of thousands of homes, but not in its own backyard — until now.

The San Francisco-based company said this month that it will enter the Bay Area market, where it will target homes ranging in value from $400,000 to $2.5 million in 200 zip codes from Sonoma to Santa Clara in Silicon Valley.

The Bay Area’s expensive and variegated housing stock could make it more difficult for the company’s pricing systems, which help it to buy, renovate and flip homes at a profit, to accurately gauge opportunities in the market. But Jessie Smith, general manager of Opendoor’s Northern California operations, said the company is prepared.

“We’re really confident at this point in our ability to provide [Bay Area] sellers with competitive offers while also building a durable business,” she said. “We feel confident valuing all kinds of homes at different price points.”

Opendoor’s losses ballooned in 2021 even as its revenue surged with its expansion into new markets; the company more than doubled its city footprint last year. Executives on the company’s Feb. 25 earnings call attributed its net losses to a sharp increase in non-cash stock based compensation.

4th time around

The proptech-focused venture capital firm Camber Creek raised $325 million for its fourth and largest fund to date, with plans to invest across the proptech ecosystem.

Camber Creek’s fundraise punctuates a year of large ones by prominent proptech VCs, who play a critical role connecting startups with owner-operators who can help them scale the business. Zigg Capital, MetaProp and Fifth Wall have all raised substantial funds in recent quarters despite the lukewarm reception some proptechs have received in the public markets (recent SPAC mergers have performed, by and large, poorly).

In an interview with The Real Deal, Camber Creek’s Casey Berman highlighted the importance of being a “high-quality filter” in proptech’s Roaring Twenties.

“There’s so much noise,” he said. “And there’s so much money coming into the industry [that] it creates even more noise.”

The new fund pushes Camber Creek’s total assets under management above $500 million. In October 2020, Camber Creek raised a $155 million fund.

Your blockquote here…

Winner printer

The Austin-based construction startup Icon raised $185 million to boost its 3D home-printing business, which it says can help combat the national housing crisis.

Tiger Global Management led the funding round, described as an extension of the startup’s $207 million Series B last August. It brings Icon’s total equity capital raised to $451 million.

Icon, which built the nation’s first permitted 3D-printed home in 2018, says it can put up homes faster and more cheaply and sustainably than the typical builder employing traditional construction methods. The company uses proprietary concrete and a tool called Vulcan, an especially large and fast 3D printer that can build structures of up to 3000 square feet.

Icon has also partnered with NASA on space-based projects.

STAT OF THE MONTH

Disaster artist

Homebound, a “next generation homebuilder,” raised $75 million in Series C funding, doubling its total equity raised to date.

The Santa Rosa, California-based startup also rounded up “hundreds of millions” in debt capital in a bid “to make building a dream home as easy as online shopping.” The company manages the entire custom build process, from architecture to insurance and move-in.

Founded in 2017 as a solution to the destruction caused by North California wildfires, the startup expanded its purview to Austin, its first “non-disaster market,” in 2021. It claims its software can make the pre-construction phase 80 percent faster and the construction phase 10 percent faster, resulting in cost savings of up to 30 percent.

Khosla Ventures led the Series C, with participation from new and existing investors including Google Ventures, Fifth Wall, Goldman Sachs and The Related Companies’ Stephen Ross.

Tapping out

EasyKnock, a sale-leaseback startup for homeowners, raised $57 million in a Series C round at an undisclosed valuation.

Demand for sale-leasebacks is booming as cash-strapped homeowners, squeezed by inflation and stagnant wages, seek to tap the equity they’ve built up, Jarred Kessler, CEO of the New York and Charlotte-based startup, said.

Sellers get more than cash in the deal; they get to stay put and thereby avoid today’s highly competitive housing market. EasyKnock charges fair market rents.

EasyKnock frames its business as part of the broader push toward “flexibility” in real estate; sellers can buy back the home from the company at a later date if they want. EasyKnock expects triple-digit growth this year, and it will soon expand into farmland.

The round brings the startup’s total equity capital raised to $105 million.

Small bytes

• Louis Buckworth, the former sales director at Zeckendorf Development’s 520 Park Avenue, joined the proptech Casa Blanca, an app-centric residential brokerage, to craft a “white glove” experience for its millennial and zennial customers.

• Funnel, a “renter-centric” proptech that wants to make leasing faster and easier, raised $36 million in Series B funding from RET Ventures and others.

• Facilio, a building operations management platform, rounded up $35 million in a Series B round led by Dragoneer Investment Group.

• Withco, a proptech that wants to help small businesses become property owners through a lease-to-own framework, raised more than $30 million in equity funding from Canaan, Founders Fund, Initialized, NFX and others.

• Northspyre, a project management tool for building owners and developers, hauled in $25 million in a Series B round led by CRV.

• Dozr, a construction equipment rental marketplace, raised $22 million in a Series B round co-led by Builders VC and the Business Development Bank of Canada.

• Revere, an invite-only networking site and marketplace for commercial real estate dealmakers, raised $5 million in a funding round led by RET Ventures.

• Showdigs, a single-family rental management platform, rounded up $7.4 million in a second seed raise led by MetaProp. The round follows its $3 million seed raise in 2019.

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