Opendoor 2022: Can't Stop, Won't Stop

2021 was a record year for Opendoor, and 2022 may be even bigger. To date, Opendoor has exponentially increased its advertising spend and homes purchased.

Why it matters: The latest data reveals a company doubling down on growth, despite rising market uncertainty and the risks illustrated by Zillow's 2021 implosion.

Opendoor's growth, as measured by the number of homes purchased, has materially accelerated.

• Opendoor's monthly purchase volume is running significantly ahead of last year; March was big and April looks even bigger.
  
  

• The company purchased 2.5x as many homes in Q1 2022 compared to the same time last year.

Opendoor's advertising spend is driving the growth in transaction volumes.

• The company doubled its advertising spend in Q1 2022 compared to last year.
  
  

• If that spend were annualized, Opendoor would be on track to invest a record $200 million on advertising in 2022.

The increasing advertising spend is causing Opendoor's customer acquisition costs to rise compared to 2021 (as calculated by total advertising spend divided by houses acquired).

• But customer acquisition costs are lower than Q1 2021, showing improving economies of scale.

The bottom line: 2021 was a record year for Opendoor -- and the evidence suggests 2022 may be even bigger.

• As a public company, Opendoor needs to demonstrate growth regardless of market conditions.
  
  

• Despite recent profitability driven by record home price appreciation, Opendoor's model only works at scale -- a scale larger than 2021.
  
  

• Opendoor remains committed to making its model work, and in a sense, is just getting started -- by operating at a scale where things get interesting.