- SmartZip has raised $12 million in debt financing from Orix Growth Capital and existing investors.
- The predictive marketing company plans to use the funds for "continued growth and diversification."
- This includes supporting its newest products, which help agents and lenders target homeowners among their contacts who are most likely to sell soon.
Real estate agents are continually exhorted to stay “top of mind” with the people they know and the people in the geographic area in which they work.
But that’s a lot of people. How do agents know precisely which ones to reach out to?
SmartZip’s answer to that question is to plug dozens of data variables into its predictive marketing platform to tell agents which homeowners are most likely to sell at any given time.
And the company just raised $12 million in debt financing to ramp up that platform and help agents get more repeat and referral business from their personal network.
Who participated in the funding?
The funding round was led by Orix Growth Capital, a “growth finance company that provides debt and equity capital to high-growth, venture-backed companies,” according to its website.
“There is perhaps no greater need for actionable predictive analytics than in the real estate and lending industries, where high-touch relationships and long transaction cycles require focusing on the right people at the right time,” said Joel Gragg, director at Orix, in a statement.
“SmartZip has established a market leader position with its unique solution for these industries. And we are pleased to provide capital financing to help drive further innovation and market adoption.”
Orix has also invested in companies such as traffic information technology firm Inrix and business review company Angie’s List, among others.
SmartZip’s existing investors also participated in the round. The company, founded in 2008, had previously raised $25 million in equity financing from Claremont Creek Ventures, Crest Capital, Cue Ball Capital, Intel Capital, and Javelin Venture Partners, spokeswoman Joan Dailey told Inman via email.
The current round brings SmartZip’s total financing to $37 million, she said.
What’s equity financing/debt financing?
In equity financing, investors put up cash in exchange for an ownership stake in the company. Debt financing “allows us to get the money we need to grow without giving up ownership,” Dailey said.
“In debt financing, [an] investor gets interest on the debt plus sometimes a limited number of warrants to purchase shares in the company at a later time at a pre-determined price,” she added.
That is the case for SmartZip in this round, she said. When asked when the round’s investors would be able to purchase shares in the company, she said, “[W]e are not able to disclose that information because there are so many factors involved. ”
Where the money will go first
SmartZip first plans to use its new funds to support the roll-out and adoption of its latest products, SphereTargeting and SmartTargeting for Lenders.
SphereTargeting combines predictive analytics and automated marketing with the aim of helping agents get more listings and more referrals from their “sphere of influence” — past clients and contacts.
“After uploading their personal databases to SphereTargeting’s predictive analytics engine, agents will receive rich data insights and seller predictions for each contact on an ongoing basis,” SmartZip said in press release announcing the product’s launch a month ago.
“Pre-configured online and social media advertising campaigns will automatically nurture their entire sphere, while enabling agents to double down on marketing and outreach efforts to top-predicted seller prospects.”
SmartZip will also use its new capital to expand into the mortgage industry with SmartTargeting for Lenders. According to its website, the tool assigns “Pre-Mover Scores” to every contact in a lender’s database or to homeowners in a selected geographic area. The more likely someone is to move or sell within the next six months, the higher their score.
Lenders can then choose to activate automated marketing campaigns to target those with the highest scores.
How SmartZip plans to help agents
SmartZip’s main customers for its predictive marketing platform are real estate agents, teams and brokers as well as mortgage lenders and banks, according to Dailey.
The company’s $12 million influx will be used for “continued growth and diversification,” SmartZip said, including these specific benefits to agents and brokers outlined by Dailey:
- SmartZip clients will expect to see faster enhancements and the continuous release of new product functionality as we continue our commitment to help agents and brokers see improved business processes and bottom-line results from our platform.
- The new SphereTargeting solution will continue to grow with more functionality to identify, nurture and close more business from an agent’s sphere of influence.
- New features in the near future to give teams, brokers and enterprise clients visibility over agent productivity and control over lead distribution. In real estate, enterprise customers could be brokers, office managers, teams, and franchises.
- Integration to third-party systems such as customer relationship management systems (CRMs) and MLS platforms to auto-import sphere contacts and leads into our platform, as well as help qualify leads in other systems with our predictive analytics.
- Additional marketing automation features to enhance lead capture and conversion, including lead capture flows, library of online/offline creatives, and new online advertising channels.
- Additional data inputs to continue to enhance our predictive analytics and insights.
Diversifying into other industries
In a statement, SmartZip CEO Avi Gupta said the company’s platform has “huge potential … across a multitude of very large industries.”
The company is initially starting its plans to diversify with the lending industry because of its “synergies” with real estate, Dailey said.
“We’ve seen demand for our solution from other industries including telcos, cable providers, moving companies and other financial services,” she said.
“SMB’s [small-and medium-sized businesses] are another natural fit for our marketing automation platform.
“We plan to remain focused on real estate and lending for now, and will consider working with channel and value-added reseller partners on other industries as appropriate.”