Redfin has announced the pricing of its initial public offering (IPO) at a strong $15 per share, putting the Seattle-based real estate brokerage’s value at $1.2 billion and raising $138 million for the company.
The initial offering included 9,231,000 shares of Redfin’s common stock. It also granted underwriters a 30-day option to purchase up to an additional 1,384,650 shares of common stock at the IPO price.
Led by CEO Glenn Kelman, Redfin offers traditional real estate services powered by its proprietary technology and collects a commission between 1 percent and 1.5 percent per transaction.
“Technology is how we sell homes for more money and charge half the typical fee,” Kelman said in a “road show” video pitch to investors. “Technology is how we meet our customers at a scale that other brokerages can’t.”
Some of these technology offerings include Redfin’s popular property-search site, mobile app, on-demand showings and what the company claims is the best home valuation model out there.
Over the next decade, the company plans “to make major investments in a completely digital process for buying and selling a home,” said Redfin Chief Growth Officer Adam Wiener in the pitch.
While the company originally planned to price between $12 and $14, the price increase is an indication of investors strong interest in Redfin.
Redfin launched in 2004 and began offering homebuying and selling services in the Pacific Northwest starting in 2006. The company more than doubled revenue to $267.2 million from 2014 to 2016 with a net loss of $77.4 million.
No online residential real estate company has filed to go public since Zillow (2011) — valued at $8.6 billion — and Trulia (2012).
The shares are expected to begin trading on The NASDAQ Global Select Market under the symbol “RDFN” today.
Teke Wiggin contributed reporting to this article.