Opendoor Technologies Inc · NASDAQ:OPEN
Opendoor Technologies — Series A Pitch Deck (2014)
20 slides from Opendoor Technologies's pitch deck, 2014
Slide 1: Opendoor Series A Financing
- OPEN DOOR rt Limi or Resident Real Estate TT Lg Series A Financing wt" mui
Slide 2: Team
TEAM Experienced team in data, technology and real estate. @ 8 Q Eric Wu Keith Rabois lan Wong Head of Geo, Trulia Partner, Khosla Vertures Data Screntest, Square CEO, Movity.com [YC 2001 C00, Square Geowth Engineer, Prismatic Principle, Real Estate Fund Executive, Linkedin/Paypal State + EE. Stanto
Slide 3: The Problem
THE PROBLEM ©) - ® Lengthy Expensive Bespoke This friction ties individuals to a location and a job, limiting geographic mobility.
Slide 4: Today
TODAY Paintul p pann ple montt o O O O 2) Find a Realtor Sale Ready Advertise Contract Close Moving is often cited as one of the most stressful events in life.
Slide 5: Market Size
MARKET SIZE 5 million $260,000 $72 billion $5 trillion One of the largest markets with little innovation.
Slide 6: Our Experience
OUR EXPERIENCE Simple, Certain & Fast Click Offer Cash Automated, online Instantly receive Funding in as sale process. a cash offer. soon as 3 days. Friction-less liquidity for residential real estate.
Slide 7: Do Sellers Want This?
DO SELLERS WANT THIS?
Slide 8: Sellers Crave Liquidity
SELLERS CRAVE LIQUIDITY Asset Analogues Companies Discount Cars CarMax 1.9 %+ Used Car Dealerships Equipment Richie Brothers 15%+ Iron Planet Electronics Gazelle 20%+ Glyde WoBuyUglyHouses In all assets, sellers demand and will pay for liquidity.
Slide 9: Our Initial Discount Is 15%
OUR INITIAL DISCOUNT IS 15%.
Slide 10: True Liquidity Discount
TRUE LIQUIDITY DISCOUNT syendere Traditional = Liquidity Discount Costs Costs aa
Slide 11: Unit Economics
UNIT ECONOMICS
Slide 12: Additional Short-Term Upside
ADDITIONAL SHORT-TERM UPSIDE
Slide 13: What Are the Core Risks?
WHAT ARE THE CORE RISKS?
Slide 14: Three Core Risks
THREE CORE RISKS oO © © AVM Error Outliers Capital Current AVMs have During the validation stage, There are Large initial high variance and purchasing greatly Capital requirements are error prone. overvalued homes is a to purchase homes. costly mistake.
Slide 15: Model Improvements
MODEL IMPROVEMENTS Current AVMs 8-10% Median Error Target and < 4% Median Error purchase home 5 th bo , 1 $1-5 per home a we $1,000's per home o downs uped ait Complete Seller Data na ate valuatior Complete Horne Data We have better economics that allows us to gather more data for every home we valu
Slide 16: Outliers
OUTLIERS Diligence Process and Key Adverse Selection Events Home Offer Inspection, Contirm Seller Data Accepted Custom BPO Price Collect more date Cases we reject Downside adverse seiecton Mitigation ef downside For every home we purchase, we ensure accuracy.
Slide 17: Capital Financing
CAPITAL FINANCING ° : Validate Growth Scale Target Rate: 8-10% Target Rate: 7-8 Target Rate: 5-4 $15-$25m $100m+ $500m+ We have 3 term sheets for debt financing at our target terms.
Slide 18: Series A Financing
SERIES A FINANCING Key Objectives Milestones to Achieve Build AVM < 8% Error Instantly, < 4% Error Post-Process “ > W ‘ Acquire Sellers Validate Seller Discount Curve as Acquire and Sell Homes Validate Cost Structure A —> We're raising $9m in our Series A to execute on three key objection.
Slide 19: The Plan
THE PLAN Long-Term Medium-Term - + = Short-Term eae ————— 201803 _ 7 = 7 201403 201403 Initiatives oA ° * Validate Model * Decrease Discount + Emer Adjacent Markets Goals * Validate Discount Curve * Increase Homes/Geo * Operate at National Scale * Validate Economics * Operate in Multiple Geos © Opti
Slide 20: Impact
IMPACT The implications if we succeed. Geographic Mobility Increase in Home Home owners will be able to move Ownership more freely, spurring economic Reducing all friction to sell makes growth, home ownership more attractive.