Real estate tech startup Offerpad to go public via SPAC merger in $3B deal - The Entrepreneurial Way with A.I.

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Thursday, March 18, 2021

Real estate tech startup Offerpad to go public via SPAC merger in $3B deal

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Offerpad is the latest proptech company to go public via a SPAC merger.

The Phoenix, Ariz.-based company announced Thursday its plans to go public by merging with Supernova Partners Acquisition Company in a deal valued at $3 billion.

The transaction is expected to close in the second, or early third, quarter of 2021. The combined company will be named Offerpad Solutions and trade on the New York Stock Exchange under the ticker “OPAD.”

Founded in 2015, Offerpad started out as primarily an iBuyer (meaning it bought homes from sellers who signed up online) and has since evolved its platform in an effort to be a one-stop shop for people looking to buy or sell a home. For example, it now also offers home improvement advances, as well as title and mortgage services. The company has raised $155 million in equity funding from investors such as LL Funds, in addition to hundreds of millions more in debt over the years.

Since its inception, Offerpad says it has completed 30,000 transactions and achieved nearly $7 billion in gross transaction volume. The company projects it will generate revenue of $1.4 billion this year, up from an estimated $1.1 billion in 2020. That compares to revenue of  $100 million in 2016. Offerpad also says it has had “positive per-home contribution margins” since 2016. 

The company has ambitious goals, projecting revenue of $2.4 billion in 2022 and $3.9 billion in 2023. It is currently active in 16 markets, recently adding Denver and Nashville to the list.

Supernova Partners, which spun up the SPAC for this deal, is led by Spencer Rascoff — a serial entrepreneur with plenty of prop tech experience who co-founded Hotwire, Zillow, dot.LA and Pacaso, and who led Zillow as CEO for nearly a decade.

PIPE investors include funds and accounts managed by BlackRock and Zimmer Partners, as well as national homebuilder Taylor Morrison Home Corp.

Offerpad says that by partnering with Supernova to become a public company, it expects it will be able “to accelerate its growth to capture more” of the market. The company currently operates in over 900 cities and towns across the country and plans to expand nationwide. 

Rascoff believes Offerpad “is incredibly well-positioned to grab a huge piece” of the online real estate market.

“iBuying has barely scratched the surface of real estate, one of the biggest addressable markets in the world,” he said in a written statement. “In general, real estate continues to be mostly analog, in contrast to other industries like grocery, autos and pharmaceuticals, but consumers demand online solutions. As they bring more transactions online, we believe online real estate as a whole is poised to grow rapidly in the coming years.”

Offerpad competes with companies such as Opendoor, Redfin and Zillow, among others.

As part of the transaction, existing Offerpad shareholders will roll 100% of their equity into the combined company and are expected to own approximately 75% of the combined entity at closing. Offerpad’s founder and CEO Brian Bair will receive high-vote stock that is expected to represent approximately 35% of the voting power of the combined company.

Earlier this month, real estate tech startup Doma, formerly known as States Title, announced it would go public through a merger with SPAC Capitol Investment Corp. V in a deal valued at $3 billion, including debt.



via https://AiUpNow.com March 18, 2021 at 11:51AM by Mary Ann Azevedo, Khareem Sudlow,