A day after Zillow announced plans to give up on iBuying, the co-founder of rival Opendoor took to Twitter to criticize the portal giant, saying its algorithm is “horrible” and its losses are likely to mount.
Keith Rabois made the comments in a series of replies to other people’s tweets Wednesday evening. The saltiest of the bunch was a response to Chris Smith, the co-founder of real estate marketing platform Curaytor, who speculated that Opendoor’s market cap could soon surpass Zillow’s.
“If you read our SPAC filings we explained how our algorithms actually work vs Zillow’s which are horrible,” Rabois wrote.
That same exchange with Smith also included a tweet in which Rabois agreed that Opendoor would surpass Zillow’s market cap. Rabois response simply stated “Next Wed :)” — a reference to Opendoor’s upcoming earnings report on Nov. 11.
In yet another tweet in that conversation, Rabois said that Opendoor hitting its previously released earnings projections would “make us 2-3x more valuable than Zillow.”
Finally, at another point in the Twitter exchange, Rabois argued that Zillow “will have even greater losses than they admit.” That particular comment came in response to another Twitter user who wondered if someone from Opendoor, which is a publicly traded company, was allowed to make such comments.
Rabois is currently a general partner at venture capital firm Founders Fund. In 2014 he co-founded Opendoor with Eric Wu. He has previously worked as the Chief Operating Officer for payments startup Square, and prior to that was a vice president at various points for LinkedIn and PayPal — the latter of which role made him a part of the so-called “PayPal Mafia” of early company personnel who went on to work with other high-profile startups. Other members of the group include Elon Musk and Peter Thiel.
Rabois’ comments on Twitter came just a day after Zillow announced it would wind down Zillow Offers, which had been Opendoor’s most formidable competitor in the iBuying space. Though there are other companies making cash offers on homes, Zillow’s announcement leaves Opendoor as the current iBuying champion.
Opendoor and Wu have remained quiet during the flurry of Zillow news this week, with fairly routine hiring and product announcements representing the sum of their public commentary. That makes Rabois’ comments all the more interesting; they represent a unique glimpse into the Opendoor psyche when the company is both ascendant but also facing questions about the viability of the iBuying model.
Opendoor went public late last year, though along with a number of other companies in real estate its stock has sputtered for much of 2021. Share prices topped out in February at nearly $39, but by the end of trading Wednesday had fallen to less than $21.
However, on Tuesday Rabois argued on Twitter that Zillow’s fate isn’t a reflection of what will happen at Opendoor.
“Selling or shorting Opendoor due to Zillow’s flaws,” he tweeted, “is akin to shorting Google due to Yahoo’s inability to monetize search well or return long tail queries properly.”
Email Jim Dalrymple II