Offerpad Goes Public via SPAC Merger With Supernova Partners

By James White Friday, March 19, 2021

As the US housing market continues to offer low mortgage rates and high prices for homes, many real estate companies and startup businesses are looking to take advantage of the market. Startup real estate company Offerpad seeks to simplify the process of buying and selling your home through the use of its online business platform. The startup business recently took its real estate company public through a special purpose acquisition company (SPAC) merger with Supernova Partners Acquisition Company.

“In general, real estate continues to be mostly analog, in contrast to other industries like grocery, autos, and pharmaceuticals, but consumers demand online solutions,” said Spencer Rascoff, co-chair of Supernova and co-founder of online real estate company Zillow. “As they bring more transactions online, we believe online real estate as a whole is poised to grow rapidly in the coming years and that Offerpad is incredibly well-positioned to grab a huge piece of this market.”

Under the terms of the merger, the combined company will be named “Offerpad Solutions Inc.” and begin trading on the New York Stock Exchange (NYSE) using the “OPAD” ticker. The new business sports a post-transaction valuation of $3 billion and is expected to gain $650 million in gross cash proceeds from the deal, adding to the existing Supernova trust fund with a $200 million common stock private investment in public equity (PIPE) as well as a $50 million direct investment from Supernova affiliates.

Real estate website on a mobile phone next to a laptop.

Digital Real Estate Solutions

Offerpad was founded in 2015 by entrepreneur Brian Bair and his team, who sought to develop a startup business that would give consumers more control over the sale and purchase of their homes. The startup company offers a simple platform for users seeking an estimate for their house. Users can easily request an offer by submitting photos or videos of their home to the Offerpad platform and expect a response within 24 hours.

After the offer is made, customers have the option of selling their home directly to the startup business and receiving benefits such as a flexible close date, extended stay, and even free, professional moving services if the new house is within 50 miles of the old home. However, consumers also have the option to list their home on Offerpad with a back-up cash offer available if they change their mind.

Riding the Housing Wave

According to an analysis from Zillow, the US full housing stock grew by a value of $2.5 trillion during 2020, representing the largest gain in the market since 2005. Startup businesses like Offerpad are disrupting the traditional process of buying and selling homes at a time of great growth in the industry. Offerpad will likely face competition from other businesses such as Knock and Opendoor as the industry continues to transition to a digital format.

About the Author

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James White is a Michigan State University graduate with a BS in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.

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