Tuesday, October 2, 2018

The Hot Property That’s Next on Tech’s Agenda: Real Estate

The Hot Property That’s Next on Tech’s Agenda: Real Estate

SAN FRANCISCO — Opendoor, a start-up that flips homes, attracted attention in June when it announced it had raised $325 million from a long list of venture capitalists. The financing valued the four-year-old company at more than $2 billion.
That was only an appetizer. Three months later, Opendoor has more than doubled its cash pile. On Thursday, the company said it had gotten a $400 million investment from SoftBank’s Vision Fund. The valuation for Opendoor remains the same.
The so-called mega-round for Opendoor was not the Vision Fund’s only major real estate-related deal on Thursday. The firm also co-led a $400 million investment in the high-end brokerage Compass that valued the company at $4.4 billion.
The hauls are part of a race by investors to pour money into technology for real estate, or what Silicon Valley now calls proptech.

Having watched tech start-ups upend old-line industries like taxis and hotels, venture capitalists are casting about for the next area to be infused with software and data. Many have homed in on real estate as a big opportunity because parts of the industry — like pricing, mortgages and building management — have been slow to adopt software that could make business more efficient.
Last year, real estate tech start-ups raised $3.4 billion in funding, a fivefold increase from 2013, according to the start-up data provider CB Insights. One firm, Fifth Wall Ventures, is entirely dedicated to proptech.
“Tech is starting to make inroads to becoming adopted, and it’s opening the eyes of investors,” said Jeffrey Housenbold, a managing director at SoftBank’s Vision Fund.
Until recently, the biggest tech innovations to hit the residential real estate market have come from listing sites like Zillow and Redfin. But the start-ups in the new wave are tackling a wide range of areas — appraisals, building management, financing, co-working, co-living, building amenities and empty retail space.

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