OpenDoor is a unicorn startup founded in 2014 with a current $1-billion-value. It is known as a real estate disruptor given its e-commerce style house-flipping platform. Perhaps OpenDoor’s success, lack of innovation in the industry, or the development of new innovations spurred many competitors to enter the burgeoning real estate tech market. OpenDoor's recent competitors include Zillow Instant Offers, Redfin Now, Amne, ZHome, Knock, OfferPad, and Faira. Below is a detailing of the research strategy and findings.
In order to ensure that the results delivered OpenDoor's competitors, I conducted a press search (limited to the last year) for industry-related features focused on the expanding real estate tech market serving the United States. To that end, I found a number of companies (Zillow Instant Offers, Redfin Now, Amne, ZHome, Knock, OfferPad, UpNest, Faira, Zumper, OfferUp, Homelink, and Ten-X). During this search, I also found a number of co-living startups that were compared to OpenDoor (WeLive, Common, HubHaus, Krash, Node, Pure House, and Roam Co-Living). Lastly, I identified additional OpenDoor competitors (and competitors of their competitors) through Owler (HomeVestors, SheaHomes, PillarToPost, InHouse Realty, NeedToSellMyHouseFast, LegacyHomes, Realtor.com, and WeBuyHouses). Then, I used Crunchbase to review and standardize all company founding dates. Only those OpenDoor competitors who launched around the same time or after OpenDoor are described below.
Zillow Instant Offers launched in May 2017 with a heavily publicized effort in Las Vegas and Orlando. In September 2017, the company’s pilot program for home sellers branched out to serving the Phoenix area. A primary selling point of the service is that a user can sell their home in approximately one week due to the platform allowing all-cash transactions. Criticism of Zillow’s effort notes that it is risky and reactions to its new venture were “largely negative.”
Redfin Now is using its online platform to allow home buyers and sellers to make exchanges for 7% commission (minimum). Redfin notes that it was founded and led by technologists who wanted to offer home buying at a cheaper rate. To do this, their real estate agents are salaried and are provided bonuses. The primary selling point of Redfin Now is that it allows its parent company (Redfin) to “buy and resell homes directly with customers.” Redfin Now was announced during Redfin’s IPO filling which notes it was looking to raise $100 million. Redfin is hoping to leverage its 20 million monthly visitors into Redfin Now’s success.
Amne is based in Austin, Texas and uses “technology to make quick offers on homes, buy, and flip them.” Amne has plans to further compete with OpenDoor by offering guaranteed sales prices and allowing buyers to upgrade to newer homes. The primary selling point for Amne is that it will use technologies to find out all the details about a prospective home and make the seller an offer within 24 hours. Its last funding round, which was seed, raised $2.1 million.
ZHome, a Las Vegas-based real estate tech startup, offers similar services as listed above (e.g., guaranteed prices and home upgrades). In October 2017, ZHome was reported to have a strategic plan to expand its analytics and data science platform within the United States. The company also has the ability to make competitive, all-cash offers within 24 hours.
Knock, based in Atlanta, raised approximately $32.5 million, and offers its real estate customers the ability to upgrade to newly-built homes, guaranteed sales prices, and serves as a listing brokerage. The company is reported to have “tiny volumes” to the tune of one house sold per month (but this was back in April 2017 and things could have picked up for the agency). The median sales price in April was $290,000.
By January 2017, OfferPad had raised over $30 million. By August of the same year, the Phoenix-based company had borrowed $260 million in order to bolster its competitive edge. The founders of OfferPad said they launched the company because they found that “buyers were evolving and looking for better ways to sell their homes.” The primary selling point with OfferPad is that it leverages technology to make the home purchasing/selling experience better for their users by eliminating hassle and uncertainty. The company also notes that it was in more markets than its competitors.
Faira is a Seattle-based startup that is also looking to expand into the San Francisco market. In 2017, the company received a $1.2 million investment to further its efforts to “reduce complication and increase transparency” for home buyers and sellers. A primary selling point for Faira is that it is “completely free for sellers.” The company has raised more than $3 million in its seed rounds.
Many of the real estate tech companies that compete with OpenDoor were founded after its launch. The companies all use technology and simplified platforms to help relax the various financial burdens that come with home buying and selling (e.g., guaranteed rates, lowered commissions, etc.). Currently, each of the newer startups, OpenDoor included, seek to expand into new markets. Older firms, like Zillow and Redfin, recently launched new arms of their existing services set to compete with the real estate disruption kicked off by companies like OpenDoor.