At the Inman News Real Estate Connect conference four years ago, ZipRealty co-founder Juan Mini sat on a panel of online real estate companies. He was a young, fresh MBA graduate from U.C. Berkeley who promised to change the industry. When pinned down about how many transactions Zip had closed, he proudly admitted to four. The real estate broker veterans in the crowd giggled at the pint-size accomplishments of this California start-up.
Today, brokers are probably not giggling. Zip has filed to go public with the Securities Exchange Commission. Based on its projected revenue this year, Zip would be one of the top 50 real estate brokers in the United States.
The initial public stock offering could raise as much as $69 million. That will give Zip the capital to invest in new technologies, more online leads and new markets.
Now, traditional real estate brokers will have to take notice of the Zip model, which offers home buyers and sellers a commission rebate of 20 percent and 25 percent, respectively. Technology efficiencies replace the necessity for all of the traditional bricks and mortar, giving Zip the funds to offer a rebate to consumers and still earn a strong margin.
The success of this IPO could force other brokers to follow suit in markets where Zip is picking up market share.
Zip is a pioneer in branding as well as its agent compensation structure, which gives the company more control over the management of the agents and the promise of a better customer experience.
Last October, Zip said it had “achieved profitability” for the first time since it was founded in 1999. At the time, the company said it had “executed more than $1.3 billion worth of real estate transactions over the past 12 months and posted year-over-year July revenue growth in excess of 100 percent.”
Today, ZipRealty filed a registration statement for the offering with the SEC. All of the shares will be issued and sold by the company.
ZipRealty has operations in Atlanta, Baltimore/Washington D.C., Boston, Chicago, Dallas, Los Angeles, Orange County, Phoenix/Scottsdale, Sacramento, San Diego, the San Francisco Bay Area and Seattle.
On the same panel with Mini at the 2000 Inman Connect conference was LendingTree founder Doug Lebda who last year sold his company to Barry Diller for $750 million. At the time four years ago, Lebda was young and as hopeful as Mini.
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