- Zillow got more than twice as much funding in its first few years than National Association of Realtors tech company Realtors Property Resource (RPR).
- NAR is pouring tens of millions annually into RPR and its board intends to continue to fund RPR "into the foreseeable future."
- Both Zillow Group and NAR have chosen to offer their agent customers tools to do business better. Neither RPR nor ZG is profitable.
The National Association of Realtors, the nation’s largest trade group, owns a seven-year-old technology company into which it pours tens of millions every year.
How does that funding compare to the initial funding for the biggest real estate company — Zillow Group — in the country?
What’s RPR — and what’s Zillow have to do with it?
Realtors Property Resource (RPR) is NAR’s tech company, a for-profit subsidiary that provides a members-only parcel-based database of 166 million properties and data tools to all of the nation’s Realtors at an annual cost of some $24 per member.
By the end of this year, NAR will have spent at least $144.7 million on RPR since 2009, an amount that is projected to rise to $167.7 million by the end of 2017, $191.2 million by the end of 2018, and $215.2 million by the end of 2019.
Zillow Group is a publicly-traded media and tech behemoth with a current valuation of $6.27 billion, 10 acquisitions under its belt and more consumer traffic than any other real estate website by far, including NAR’s realtor.com.
While Zillow Group and NAR are perhaps not obvious competitors, each strives to woo — and keep engaged — their agent audience, at least some of whom are no doubt the same people. NAR has nearly 1.2 million members, and Zillow counts some 92,000 agents as advertisers, many of whom are likely to be members of NAR.
Both have taken the tack of offering their agent customers technology tools to help them do business better. Neither ZG nor RPR is profitable.
NAR and ZG also have a contentious history, often tied to the influence each wields over the nation’s real estate agents and consumers.
The funding match-up
So how did RPR and Zillow each start out in terms of funding?
Turns out Zillow got a lot more funding in its first years: $87 million in 2005-2007, but no additional funding before its initial public offering (IPO), according to CrunchBase.
Zillow went public July 20, 2011, raising $75.7 million. Its market cap was $962 million that day. Zillow had 10,710 Premier Agent subscribers then.
By contrast, RPR got $39.2 million in its first three years. The amount spent annually on the company has been rising nearly every year and is projected to keep doing so at least through 2019. The NAR board of directors intends to continue to fund RPR “into the foreseeable future,” according to a May 2016 NAR Finance Committee report.
Settlement money paid out?
Of note: In June, Zillow agreed to pay its main competitor, realtor.com operator Move Inc., $130 million in a settlement to resolve all legal claims between them — an amount bigger than all of Zillow’s pre-IPO funding.
Zillow was to pay all the funds in full just two weeks after the settlement, on June 20. Neither Zillow nor Move would tell Inman whether the funds had been paid, saying the information would be disclosed in future earnings reports from their parent companies, Zillow Group and News Corp.
NAR, Move’s co-plaintiff in the lawsuit, is set to get 10 percent of the funds after Move’s legal costs are deducted. When asked how much of the proceeds NAR will get and how they will be used, NAR spokeswoman Sara Wiskerchen told Inman via email, “The final figures haven’t yet been determined so no decisions have been made.”
At the time of the settlement, NAR President Tom Salomone said Move covered the costs of the lawsuit and will receive the bulk of the settlement funds.
“[I]t is NAR’s hope that they will invest this money in initiatives that enhance consumer experience on realtor.com and benefit our members in support of the Realtor brand,” he said.
After the amount NAR will receive is determined, “NAR’s leadership team will consider how best to apply those funds in service of NAR’s Realtor members; we will share that information as soon as a decision is made,” he added.
