Opendoor to Raise $200 Million at $3.7 Billion Valuation

It was announced Friday that real estate startup Opendoor filed paperwork in the state of Delaware indicating its intent to raise $200 million in funding at a $3.7 billion valuation. 

A Huge New Round of Funding

According to the paperwork, the shares are described as ‘Series E-2’, which according to reports, likely means the latest round will be an extension of the company’s latest existing round of funding. That round - which closed in September of last year - initially closed for $400 million and was led by SoftBank’s Vision Fund. The new round will likely be added to that. To date, Opendoor has raised more than $1 billion after six rounds of funding. The announcement comes just months after one of Opendoor's main competitors - Knock - announced it had raised $400 million in its own round of Series B funding.

A New Way of Home-Buying

Opendoor aims to streamline the home-buying process. In order to do this, Opendoor plays the middle-man between buyers and sellers. As the company explains their role, “If you’re selling, sell your home to us to eliminate the hassles of showings and months of uncertainty. If you’re buying, we make it incredibly easy to tour hundreds of Opendoor homes so you can find the perfect one.” This model is similar to Knock, which purchases the house from the seller outright then collects a fee. 

A Company on the Rise

According to reports, more than 800,000 people toured an Opendoor home in 2018. Of those 800,000, Opendoor claims it has served over 30,000 customers. These customers are distributed across 19 metro regions in 20 cities. The company also states it currently has more than 2,000 monthly customers. To date, Opendoor has managed to attract more than 36 investors, including Andreessen Horowitz, SoftBank, GV, and others.


Compass Raises $400 Million Series F

 

After raising another $400 million in Series F funding, NYC-based Compass has earned a $4.4 billion valuation. This valuation is double what it was just last December.

Compass Closed Another Monster Round of Funding

On Thursday September 27th, New York City-based real-estate startup Compass closed the $400 million Series F round led by SoftBank. Softbank also led Compass’s $450 million Series E which the company closed last year. The most recent round solidifies a total of $1.2 billion raised by the startup after 14 rounds of funding and gives the company a $4.4 billion valuation.

A Company Led By Two Exceptional Founders

Compass was founded in 2012 by Ori Allon and Robert Reffkin. Allon previously sold two companies to Google and Twitter while Reffkin served as Chief of Staff to the president of Goldman Sachs and served in the White House. Soon the pair were able to raise $8 million in seed round funding from a combination of Founder’s Fund, Thrive Capital, and Goldman Sachs, as well as individual investors, including American Express CEO Kenneth Chenault, and ZocDoc CEO Cyrus Massoumi.

Compass is the Right Company for the Right Market

Compass is a mobile app which pairs prospective buyers and sellers. With over 30 offices in 19 regions, Compass caters to the luxury high-end market. According to a company statement the new funds will be used to expand internationally as well as solidifying its position in the United States.

In referencing the latest round, company founder and CEO Ori Allon remarked, “Real estate is the largest asset class in the world, and we are excited to bring Compass technology to international markets. Our incredible track record of growth in the U.S. validates our vision and sets us up for the global stage. The support of our investors will strengthen the Compass mission to help everyone find their place in the world by advancing our national and global expansion and continue building our agent productivity platform through technology and innovation.”

Is an IPO in the Near Future?

While the company has yet to disclose profits it has mentioned that it seems on pace this year to more than double its 2017 sales volume. Such an increase would place the company at more than $34 billion in sales. Such enormous success has fueled only speculation that an IPO may be in the company's near future.

 

 


Hudson Yards - The New $25 Billion Midtown Neighborhood

By now you’ve no doubt  heard of the new midtown expansion, Hudson Yards. With an estimated price tag of $25 billion, the project is being billed as a the most expensive real estate development project in U.S. history. Today, Ignitia Office takes a closer look at this mammoth project, how it came to be, and what to expect when it opens.

Large Scale Planning

Having broken ground in 2012, the 28-acre mega-project will actually be a series of 33 smaller projects that when complete, will offer up an entirely new neighborhood on the city’s far west side. Spearheaded by real estate powerhouses Related Companies and Oxford Properties, the project was planned and funded under a set of agreements in conjunction with the city, state, and MTA. In commenting on how the project was financed, Related CEO Jeff Blau remarked, "In total it'll be about $25 billion of investment into New York City. We're a private company, so we bring in capital partners from around the world, U.S. pension funds, foreign sovereign wealth funds and traditional construction lenders." When complete, the project will boast 16 new skyscrapers designed by multiple architects and will boast nearly 20 million square feet of new floor space.

An Innovative Design

Located at the west side rail yard between 30th and 41st streets to the north, and 10th and 11th avenues in midtown Manhattan to the west. The location already has its own subway station on the 7 train, Hudson Yards. But building at the yard was no small task. For over sixty years, the air rights over the rail yard have been very sought after property. How though, could anyone possibly develop the area above the yard without displacing the rail yard itself? The solution was found by way of a $400 million joint venture between Related Companies and Oxford Properties in which the two companies found a way to build a platform above the yard on which the buildings would stand, while still allowing trains to be housed beneath. The plan was approved, and on December 4, 2012 the project broke ground.

Luxury Living and Retail

According to Related senior vice president Thad Sheely, the aim of the complex is to combine offices, residential, and high end retail space all in one place. Add to this the plans for a 14-acre open-air Public Square similar to the city's High Line, and you have the makings of New York's newest high-end district.

From penthouses to retail, one thing that’s certain is that the entire project will be top notch. With retailers like Neiman Marcus, Cartier, Rolex, and Piaget already calling the complex home, the crowd the neighborhood will attract will certainly be big spenders. And all this is by design. According to Related Chairman Stephen Ross, “If you look at where all the young people are today, where they want to be, where all the money is going, it’s the West Side of Manhattan. The yards will be the epicenter of all that.”

With an estimated completion date of 2024, hopes could not be higher for the ultra-swank new neighborhood. We can't wait to see it!

 

 

 


The Future Of Retail

Experience + Revenue Per Sq. Ft.= Future of Retail

Amazon and online retail are changing the way we shop. Brick and mortar stores that do not offer a positive consumer experience are shuttering at what feels like an alarming rate. Shopping malls around the country are being torn down, repurposed and left behind.

In order to survive retail stores must adapt to create a consumer experience that is better than buying online

Here is a short list of businesses that are filing bankruptcy or shutting down many of their physical stores. The links below tell some of the story of each business's store closings.

-Sears
-Radio Shack
-Bebe Stores
-Payless Shoes
-Limited Stores
-HHGregg Inc
-Gander Mountain
- Rue 21
-Crocs
-JC Penney
-American Apparel
-Wet Seal
-Macys
-K Mart
This year the WSJ estimates that over 8000 Retail stores will be closing their doors this year. Yet, not all retail is failing.

Why Apple is Winning in Retail

Apple is an exceptional example of the power of a quality retail experience. Across the brand at almost any Apple store you are greeted by employees who are passionate, knowledgeable and help you with your overall consumer experience.

Apple has a great return policy, provides in store classes for consumers of many skill levels, and keeps their stores clean, efficient and organized.

Have a problem with your Apple product? Set a time online and they will help you troubleshoot it for free.

The result is that Apple is one of the most valuable companies in the world, and has the highest revenue per square foot of any retail chain (over $4,000 per square foot).

Premium Products Not Required

Brands like Costco, Victoria Secret, and Dicks Sporting Goods provide consumers with experiences that you can't get online.

Costco may be known for the ability to buy in bulk, but the in store consumer experience is surprisingly good. From free samples, to happy employees, to well put together product demonstrations Costco blends value with experience.

Engaging Communities

As human beings we desire to be a part of a group or tribe. Despite advances in technology human nature values face to face interactions and being part of a group.

Stores like Lululemon (an athletic clothing company) & Whole Foods do an outstanding job of engaging and supporting the local communities. Walk into a Lululemon and you will find pictures of local fitness instructors, yoga classes and passionate employees.

The grass roots approach to experience combined with a great product allows Lulu the ability to succeed in the current markets.

Whole Foods supports community events, and spends 5% of their days helping in communities.

Crafting a real sense of community and reaching out to influencers in local communities takes time, effort, knowledge and passion. It is a dynamic change from simply offering goods.

Surviving Future Retail

By having an experience and a product people want to buy, brick and mortar retail will move forward. The change is that offering a product alone is likely not enough to offset the costs of brick and mortar stores. By providing consumers with a memorable positive experience retail stores will continue to grow their brands.