Real estate search site Trulia this week announced $10 million in funding led by Sequoia Capital. The news makes it clear that new online real estate darlings are plumping up with support and here for the long haul.
Trulia and Zillow have emerged as the two most recognized entrants in the last few years, though neither has announced profitability to date. Trulia claims around 1.5 million unique visitors per month, while Zillow claims somewhere around 4.1 million unique visitors per month.
Each of these Internet whiz kids has strong backing from prominent venture capital firms with successful records in previous online ventures.
Trulia’s latest financial backer, Sequoia Capital, has a longstanding reputation for partnering with leading innovators such as Apple’s Steve Jobs, Oracle’s Larry Ellison, Google’s Larry Page and Sergey Brin, and YouTube’s Chad Hurley and Steve Chen.
Zillow’s $57 million in funding has come from investment fund partners like PAR Capital Management, Benchmark Capital and Technology Crossover Ventures.
Trulia and Zillow each have built a consumer offering: no-strings-attached real estate information that is free and searchable at one destination. They’ve made the consumer the first priority while trying not to step on the industry’s toes.
Each has approached the industry offering partnerships, rather than threats of disintermediation, where some preceding online ventures went wrong. Trulia’s strategy has been to partner with brokers to get listings, while Zillow so far has relied on consumers and agents to flag properties for sale.
Zillow last week said it is discussing developing feeds for brokers to send bulk listings to the site. Couple that news with Trulia’s latest launch that enables consumers and agents to ask and answer questions about particular neighborhoods and other topics, and the two begin to look more like direct competitors. (Zillow also allows people to ask and answer questions directly on its site.)
This new face of online real estate has caused everyone to rethink the agent value proposition. No longer the information gatekeepers, agents today are valued more for their local expertise. These models recognize and exploit that.
Despite differences, the similarities of these two run long:
- Each was shown the door at a Prudential Real Estate convention in San Diego earlier this year.
- Each keeps a company blog, where employees and executives of all levels — including the founders and CEOs — contribute their perspectives and personalities.
- Each has launched widgets of their offerings for realty agents to add to their blogs and Web sites.
- Both have heat maps that color code market areas according to the level of activity or pricing.
- Each has bypassed the multiple listing service to instead focus on brokers and agents as the source of property listings.
Trulia and Zillow have come into real estate in phases, adding layer after layer of new services to consumers and agents, rather than trying to make a big splash in one swift launch.
They started as small operations, but in a short time have become familiar industry forces. Considering the reputations of their supporters — both financial and in industry partnerships and consumer eyeballs — they will be here long enough to force some change.
They’ve already caused others to follow suit. A National Association of Realtors advisory group last week revealed plans to build a national real estate database that could be the roots of a national MLS. The database would include comprehensive information for all categories of property, including residential and commercial properties and vacant land, and properties could be flagged “for sale” or “for lease.” This sounds very similar to Zillow’s underlying database.
Move Inc., the company that operates the popular Realtor.com site, recently revealed plans for an online community that will allow consumers and real estate professionals to interact online — the company reported that this new venture will cost as much as $6 million. This also sounds like Zillow and Trulia offerings.
Whether the new online forces succeed on profitability remains in question, and suggests a long road ahead. With $11 billion expected in online real estate advertising this year, everyone wants to know how the pie will split up.