This is probably the start-up that will make Real Estate Tech sexy.
The proposition is simple: OpenDoor will buy your home, at the press of a button, very quickly.
The ramifications are incredible: no more property 'chains', creating liquidity in the market, giving rise to Private Equity funds wanting in on this arbitrage opportunity.
There's a significant dollar value to be gained for each transaction. OpenDoor, if they can find people who want to sell quickly, could turnaround that property at more than 10% of the purchase price within a few months.
There's not much in the public domain, but what we know is:
1. Code name was Homerun, before an official filing revealed the OpenDoor name.
2. Is being run/backed by Khosla Ventures Partner Keith Rabois (interesting video interview here: http://www.quora.com/What-chances-of-success-do-you-see-for-Homerun-the-startup-launched-by-Keith-Rabois
3. Have raised seed funds: http://recode.net/2014/07/07/opendoor-raises-nearly-10m-for-instant-home-sales/ - http://techcrunch.com/2014/07/07/opendoor/
The 'webuyanycar.com for US residential real estate' model, using a proprietary valuation algorithm to price the homes they'll buy is certainly ballsy. The company undoubtedly can build a balance sheet to take on this risk. Especially considering they are targeting 'middle America' where homes really aren't worth very much.
One thing though: odd that they'd raise such a (relatively) small amount of money with the recent $10m announcement:
Webuyanyhouse.com hasn't had much traction in the UK, but they aren't as technologically savvy (or focused on the customer experience being 'magic').
There are already 'investors' who arbitrage in the UK, buying undervalued homes via private treaty and offloading them in auctions. You can see such a model, powered by technology (for valuation, as well as legals) becoming a reality in the 'provinces'.
Can OpenDoor hit a home run? Undoubtedly!