Venture capitalists are increasingly targeting "proptech" startups seeking to do to housing and real estate what Uber and Airbnb have done to the taxi and hotel industries.
What makes real estate so enticing to investors is that housing industry companies have been slow to adopt new technology to make pricing, financing, and building management more efficient, leaving the doorway open for disruption. While Zillow and Redfin have added new tech to housing, a "new wave" of startups is hitting the industry, seeking to innovate appraisals, co-working, co-living, amenities, and more. The New York Times reports that in 2017, real estate tech startups raised five times more in funding than in 2013, a total of $3.4 billion.
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. 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.