The company, which started out as an iBuyer – buying homes from sellers who signed up online – is going public with a SPAC merger. The transaction is expected to close in the second, or early third, quarter of 2021, and will operate under the name of Offerpad Solutions.
Since it was founded in 2015, the company has had positive per-home contribution margins, achieving almost $7 billion in gross transaction volume and completed over 30,000 transactions. But the challenge is to expend into new markets and add more to the services it offers. The growing revenue, from $100 million in 2016 to $1.1 billion in 2020, made the company set ambitious goals, to project a revenue of $1.4 billion in 2021 and $2.4 billion in 2022.
Supernova Partners Acquisition Company is led by Spencer Rascoff – former chief executive officer of Zillow Group Inc. for nearly a decade, one of Offerpad’s main rivals – who co-founded Hotwire, dot.LA and Pacaso. He believes that Offerpad “is incredibly well-positioned to grab a huge piece” of the real estate market.
Through this merge, Offerpad hopes “to accelerate its growth to capture more” of the market, as currently, the company operates in over 900 cities across the country and is active in 16 markets, recently adding Denver and Nashville to the list – and plans to expend nationwide.
“iBuying has barely scratched the surface of real estate, one of the biggest addressable markets in the world” Rascoff 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’s CEO Brian Bair said that despite the new capital, the company will remain disciplined and not overpay for the homes it purchases.