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Chamath launches SPAC, SPAC and SPAC as he SPACs the world with SPACs

SPACs are going to rule the world, or at least, Chamath’s future portfolio.

Chamath Palihapitiya, the founder of Social Capital, has already tripled down on SPACs, the so-called “blank check” vehicle that takes private companies and flips them onto the public markets. His first SPAC bought Virgin Galactic last year, and his second SPAC bought Opendoor this week in a blockbuster deal valuing the instant home sale platform at $4.8 billion, less cash. His third SPAC officially fundraised in April, and has yet to announce a deal.

Now, it looks like he’s going to double down on his triple down. After the bell rung on Wall Street this Friday, the venture capitalist filed three new SPAC vehicles with the SEC. Social Capital Hedosophia Holdings Corp. IV has a headline value of $350 million, Social Capital Hedosophia Holdings Corp. V has a headline value of $650 million and Social Capital Hedosophia Holdings Corp. VI has a headline value of $1 billion.

Those headline values are targets: each SPAC will need to go through an investor roadshow process and officially raise capital before they can begin trying to find an acquisition target. Each SPAC is independent, and may share investors or have entirely independent investors around the table.

The three new SPACs share similar managers: Palihapitiya himself; Ian Osborne, who manages Hedosophia; Steven Trieu, the CFO of Social Capital; and Simon Williams, the chief administration officer of Hedosophia.

However, each has a different fifth director, who perhaps sheds some light on how each SPAC differs in strategy. Nirav Tolia, a co-founder and CEO of popular social network Nextdoor, is joining the fourth SPAC. Jay Parikh, a former head of engineering at Facebook, who left earlier this year, is joining the fifth SPAC. And finally, Dick Costolo, the former CEO of Twitter and current venture capitalist, is joining the sixth SPAC.

We’ve been talking about the accelerating pace of SPACs this year, and that appears in microcosm here around these Social Capital vehicles. It seems as though Palihapitiya and Hedosophia not only have great ambitions for these vehicles, but are increasingly mechanizing the process of fundraising them and taking advantage of markets that seem excited for any avenue toward growth.

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Schools are closing their doors, but Opendoor isn’t

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This week Natasha Mascarenhas, Danny Crichton and myself hosted a live taping at Disrupt for a digital reception. It was good fun, though of course we’re looking forward to bringing the live show back to the conference next year, vaccine allowing.

Thankfully we had Chris Gates behind the scenes tweaking the dials, Alexandra Ames fitting us into the program and some folks to watch live.

What did we talk about? All of this (and some very, very bad jokes):

And then we tried to play a game that may or may not make it into the final cut. Either way, it was great to have Equity back at Disrupt. More to come. Hugs from us!

Equity drops every Monday at 7:00 a.m. PT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

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Report: One of Social Capital’s newest blank-check companies is looking to reverse merge with Opendoor

Some people may have slowed down in 2020, amid a pandemic that has shut down much of the world. Not Chamath Palihapitiya .

According to a new report in Bloomberg, Opendoor, the San Francisco-based company that aims to help people buy and sell homes with the “push of a button,” is in advanced talks to go public through a merger with Social Capital Hedosophia Holdings Corp. II.

The outlet says the blank-check company, which raised $360 million in April and is led by Palihapitiya, is “discussing raising fresh equity to help fund the transaction with prospective investors” and that the combined company would be valued at around $5 billion in the deal.

It adds that nothing has been finalized and that the deal could still fall apart.

We reached out to both Opendoor CEO Eric Wu and to Palihapitiya for comment. An Opendoor spokeswoman said the company has no comment; we have yet to hear back from Palihapitiya but will update this story if we do.

Assuming the deal is fairly far along, and at a $5 billion valuation, one could see the appeal for Opendoor, which was last valued by private investors at $3.8 billion and that like many other venture-backed outfits has had a topsy turvy 2020. Indeed, in April, it laid off 600 employees, or 35% of workforce at the time, citing the “unforeseen impact on public health, the U.S. economy, and housing,” prompted by COVID-19.

In recent months, however, home sales around the country have been brisk, spurred by low mortgage rates and a heightened appetite for more space, particularly outside of crowded cities.

According to a late-August report by the National Association of Realtors, U.S. home sales rose an unprecedented 24.7% in July, up 8.7% from the same time last year. Home sales rose 20.7% in June, too (which was a record at the time).

The equation makes sense for Palihapitiya, too. For starters, Opendoor is a brand that many retail investors already know and can easily understand and would likely continue to support as a public company. In fact, its consumer appeal isn’t so unlike that of the space tourism company Virgin Galactic, which Palihapitiya’s first blank-check company ultimately went on to acquire after it raised $600 million in 2017.

The combined outfit went public last October with a $2.3 billion market capitalization; its market cap is now above $4 billion.

As for what Palihapitiya might do with a third special purpose acquisition vehicle that he also whipped together in April — having raised $720 million, it’s the biggest SPAC of the three — stay tuned. The company has said it will use its IPO proceeds to buy a tech company that’s primarily outside of the United States.

In the meantime, Palihapitiya isn’t focused on his own SPACs alone. He’s also investing in Desktop Metal, a Burlington, Ma., company set to go public via a separate SPAC.

Desktop disclosed plans last week to list on the New York Stock Exchange by merging with Trine Acquisition Corp, a blank check company that raised $261 million in March of last year. Palihapitiya had helped lead a $275 million PIPE (for private investment in a public equity) investment to finance the deal.

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