Eric Wu heads one of real estate’s most innovative companies in Opendoor Tegnologies (Nasdaq: OPEN), which pioneered the iBuying brokerage model when it launched in Phoenix in 2014. The company has expanded the model rapidly since then and entered 2020 with operations in 20 cities. The company went public on December 21, 2020, via a merger with a special purpose acquisition company with a valuation of over $15.0 billion.
Like Compass, Opendoor was a victim of a crisis not of its own making. The implosion of WeWork led to the pullback of SoftBank, a major investor in both WeWork and Opendoor, leaving the company in the lurch in the fall of 2019. To make matters worse, just when Opendoor was looking to make serious waves, the pandemic hit. Opendoor suspended operations in March, and was forced to lay off 35 percent of its workforce in April.
Wu showed courage by donating his entire salary for 2020 to a relief fund for employees. He then showcased what leadership means by bringing Opendoor back from the brink of disaster by inking a deal with Social Capital, the investment vehicle of the Silicon Valley legend Chamath Palihapatiya. Instead of falling off the ledge, Opendoor went public on December 21st, by way of acquisition by Social Capital’s SPAC (Special Purpose Acquisition Company) at a valuation north of $6 billion. The stock price jumped more than 100% in a matter of days and Opendoor ended the year with a market cap of $12.37 billion.
The information that Opendoor disclosed as it went public showed just how enormous its business is:
- Over the past five years, the company has bought and sold over 80,000 homes, making Opendoor one of the largest buyers and sellers of single-family homes in the S.
- Revenue growth of over 100 percent in each of the last four fiscal years.
- In 2019, it sold almost 19,000 homes and generated $4.7 billion in revenue, and despite the chaos of 2020, Opendoor projects $2.5 billion in revenues for the year.
- Opendoor reports a Net Promoter Score from customers of over 70, which is higher than Amazon’s 69 and Apple’s 47.
A legitimate market maker whose core business is buying and selling homes, Opendoor also revealed that it is seeing phenomenal attach rates on ancillary businesses as well: 83 percent for title and escrow in the most recent quarter. Opendoor is well positioned to continue innovating the way that Americans buy and sell houses and the company is a legitimate competitor to Zillow and Redfin.
Not only has Eric Wu successfully brought his company back from the brink, he has positioned Opendoor as an important part of the future of the residential real estate brokerage industry, making him one of the 10 most powerful people in residential real estate.