US home-selling platform Offerpad to go public in US$3b SPAC deal

[BENGALURU] Offerpad said on Thursday it would go public through a merger with a blank-check company in a deal that values the US home-selling platform at US$3 billion.

The deal with Zillow co-founder Spencer Rascoff-backed Supernova Partners Acquisition Company will fetch US$650 million in proceeds for Offerpad. This includes a private investment of US$200 million from affiliates of Supernova, funds managed by BlackRock, homebuilder Taylor Morrison Home Corp and others, as investors bet on the digitalisation of the US$1.6 trillion residential real estate market.

Supernova stock was down nearly 2 per cent on Thursday.

Offerpad, which expects revenue of US$1.4 billion in 2021, said the company will be listed on the New York Stock Exchange under the ticker "OPAD", after the deal closes.

Arizona-based Offerpad provides an online platform for selling and buying homes. Sellers can upload photos and videos for a virtual tour, a feature that has been gaining popularity during the global pandemic.

The platform also buys homes from owners, renovates them and lists the properties for sale.

The company plans to use the capital raised to expand beyond its current presence in over 900 cities across the United States and to flip homes in a higher price range. The top end of its price range is now typically US$400,000 and will go to US$1 million, said Brian Bair, founder and chief executive at Offerpad.

Blank-check firms, or special purpose acquisition companies (SPACs), raise capital through an initial public offering to buy a private firm. Money raised through SPAC IPOs so far this year has already overtaken the US$83.4 billion they raised in all of 2020, according to SPAC Research.

Opendoor Technologies, another homeselling platform, also went public through a SPAC deal at a valuation of at US$4.8 billion.

REUTERS