$1B invested in real estate tech, with companies bringing innovation to search, discovery leading the pack

Valuations, funding and acquisitions: 'Show me the money' chart

FixingRE_2014_revise2

Click chart for full-sized version.

Back by popular demand is the Fixing Real Estate-Scape, again inspired by LUMA Partners‘ Terrence Kawaja. We’ve scoured Inman News stories, Angelist, CrunchBase and collected data from SEC filings to deliver this year’s chart, which is still very much a work in progress. The outpouring of corrections and additions last year was more than welcome and helped make it a lot better. Keep them coming.

So what’s changed? Where are we?

In the year or so since we originally published this chart, we saw our predictions of an increase in VC funding, mergers and acquisitions (M&A) and public market valuations come true … sort of. Some bright spots for certain: Zillow is now riding high at a $4 billion market cap, up more than 100 percent in the last year. Redfin is on a tear. VC came in to some pure-play real estate technology companies (more on that below), but even more so in the service marketplaces that serve the real estate category. And not just small firms, but the big ones. And there was some M&A, though nothing above $50 million from any pure-play real estate technology company. In summary: This is “still early days.” The largest financings were for companies that are bringing innovation to search/discovery (e.g., Urban Compass, Redfin) or companies who play in many verticals in addition to real estate (e.g., FindTheBest).

Show me the money: public market valuations, funding and acquisitions by category

Here is our best effort to catalog the companies in this chart who are publicly traded, took institutional funding (i.e., VC funding, not individual/angel investor funding), and/or were acquired. Since we didn’t include these data points in last year’s chart, these stats are not necessarily limited to events over the last year. This is the current snapshot of institutional funding, M&A and public market valuations in real estate technology.

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Side notes: 1) This will focus mainly on companies who play in residential real estate as a core function of their business, as many giant public companies on this chart (e.g., Salesforce) aren’t relevant comparables. 2) We aren’t including the franchisors in this analysis, where we saw the IPO of Re/Max and some M&A (namely Intero’s acquisition by Berkshire Hathaway’s HomeServices in addition to the latter’s acquisition of Prudential Rubloff Properties last year). 3) This analysis doesn’t include the rental market, which has seen a some impressive VC funding (e.g., Apartment List, Zumper, Lovely, et al.) and one large acquisition of Apartments.com by CoStar. 4) This also ignores the giant mortgage and title services market, which could (and should) get its own chart and analysis. Big moves like this one are certainly reason enough. And finally, 6) We’ve focused this analysis on the categories that seem to have the most movement in the past year. Now let’s get to it!

In summary: this is still early days."

Search and home search-related tools (including collaborative search tools and agent lead gen from SERPs)

Public companies:
Zillow ($4B market cap as of 5/15/14)
Trulia ($1.2B market cap as of 5/15/14)
Realtor.com ($402M via Move, Inc. market cap as of 5/15/14)
AOL/Yahoo/MSFT Real Estate (products of public companies, market caps $3B, $34B, $327B, but irrelevant)

VC funded:
StreetEasy ($2.9M from FA Technology Ventures)
RealScout ($1.1M from DCM, Formation8, et al.)

Several acquisitions, mostly by Zillow. Namely: StreetEasy ($50M), HotPads ($16M), Buyfolio (undisclosed). In addition, there was HomeGain (acquired by Reply for an undisclosed amount), and RED Digital, acquired by Nationstar Mortgage ($18M).

Online brokerages (which include search as a core function)

Public companies:
ZipRealty (market cap: $72M as of 5/15/14)

VC funded:
Redfin ($96.8M from Greylock, DFJ, Madrona, et al.)
RealDirect ($2.7M from Tribeca Venture Partners, et al.)
HomeSnap ($5.5 from Revolution, et al.)
Urban Compass ($33M from Founders Fund, Goldman Sachs, Thrive Capital, et al.)

In 2013, online brokerage Movoto was acquired by the Japanese company Recruit Holdings, one of the first signs of international interest in the U.S. online brokerage category. Financial terms were not disclosed (but perhaps someone can dig this up in Japanese filings?)

Agent search/agent matching

Public companies: Portals Z, TRLA, MOVE (see above) all play in the agent search space

VC funded:
HomeLight ($1.50M Google Ventures, Innovation Endeavors, et al.)

Market data and research tools

Public companies:
CoreLogic ($2.54B market cap as of 5/15/14). While real estate is only one part of their business, they’ve been busy bulking up their real estate technology portfolio, including the recent acquisition of Case-Shiller and perhaps more notably its integration of DataQuick Information Systems, which it acquired for $661M this year. Add that to Equecat (provider of catastrophe risk models, software, data products and consulting for insurance) and CDS Business Mapping and Inman News had it right when it said CoreLogic is on quite a “tear” as of late.

VC funded:
FindTheBest ($17M from Kleiner Perkins, et al., but real estate only one part of their business)

Buyer education, buyer process management

VC funded:
Amitree / Closing Time ($2.7M from Accel, et al.)
Redfin (see above)

One acquisition, Doorsteps for $2.3M according to Move Inc. SEC filings

Transaction management/e-signature platforms

VC funded:
Docusign ($203M from Kleiner Perkens, Second City Ventures, Ignition Partners, et al.)
DotLoop ($7M from Trinity Ventures)
EchoSign (Raised $8.5M from Emergence, et al., acquired by Adobe for $X00M), though real estate is only one small piece of their business
Reesio (Raised $1.3M from Digital Garage, et al.)

Two acquisitions, Cartavi by DocuSign (undisclosed) and EchoSign by Adobe (undisclosed, but likely over $100M)

Tour/mapping/showing tools

VC funded:
Floored ($5M from Accel, Lerer, Greycroft)
Animoto ($30M from Madrona, et al., though real estate is only one small part of their business)

Website/IDX/MLS tools

VC funded:
Placester (~$9M from Angel Street Capital, Romulus Capital, et al.)
Goomzee ($1.7M from H12 Ventures et al.)
Two acquisitions: Diverse Solutions by Zilllow for $7.8M, and RealtySoft by WebsiteBox for an undisclosed amount

Service marketplaces

Public:
Angie’s List (market cap: $589M as of 5/15/14)

VC funded:
Redbeacon ($7.4M from Venrock, Mayfield, et al.)
Pro.com ($3.5M from Mardona, Andreessen Horowitz, Redpoint, et al.)
Porch ($8.2M from SV Angel, et al.)
Houzz ($48.6M from Sequoia, Kleiner Perkins, et al.)

And, of course, Redbeacon was acquired by Home Depot for estimated ~$70M-$90M

CRM/lead management solutions

We’re leaving out the behemoths who don’t really focus on real estate — Salesforce, Eloqua, SugarCRM, et al. — but the real-state focused standouts here are:

Market Leader, once public, now part of Trulia after a $355M acquisition a year ago.

VC funded:
BrightDoor ($2.2M from IDEA Fund Partners, et al.)

And at least one notable acqusition: FiveStreet was acquired by Move Inc.  for $4.8M.

Jonathan Aizen is the founder and CEO of Amitree Inc., the developer of Closing Time, a tool to help home buyers and their agents navigate the process of buying a home, organizing the dozens of tasks into an easy-to understand checklist that is customized for each buyer’s unique situation. Amitree is backed by the venture capital firm Accel Partners as well as Morado Venture Partners, Owen Van Natta, Jerry Yang, Gideon Yu, Vishal Makhijani, Rob Chandra, and Farzad Nazem.

Editor’s note: This article was updated on May 21, 2014 to include additional companies suggested by readers.


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