After real estate data and analytics company Remine announced earlier this month that it had raised $30 million, rumors began to swirl that multiple listing service executives were among the firm’s undisclosed private investors.
Inman received separate anonymous tips that multiple MLS execs and board members (current and former) are private investors in Remine — either directly or through an investment vehicle. Attempts to identify the tipsters were unsuccessful.
But Mark Schacknies, CFO and co-founder of Remine, says that, with the exception of a Canadian MLS exec Remine has no business with, that is absolutely not the case. No one who was in a position to decide whether an MLS took Remine on as a partner is an investor in Remine, Schacknies told Inman in a phone interview.
“I suspect that the rumors … is to suggest that we somehow bought our success and that is frankly what is both laughable and even slightly offensive,” he said.
“The fact of the matter is, we’re providing innovation to the space and no one has ever seen anybody approach it this quickly and this successfully, and so the shade is quite clear on why it’s being done.”
Inman reached out to all 35 of Remine’s publicly-known MLS partners and the 33 MLSs who responded corroborated that no one affiliated with their MLS was an investor in Remine. Most also said that conflict of interest policies would require that executives and board members disclose any investment in Remine.
But in responding to the rumors, Schacknies painted a picture of how messy the politics and competition in the real estate industry can get, while at the same time sharing more about Remine’s future expansion plans and its business model, which largely involves upselling its lead prospecting products to real estate agents.
He said executives from MLSs that Remine has partnered with told him they thought “one group” was behind the rumors, but he declined to specify further. When asked whether he thought Remine’s potential competitors, such as CoreLogic, FBS or Upstream, had anything to do with the rumors, he again declined to comment.
Schacknies also denied that Remine paid any MLS staff, executive leadership or board members as advisors to Remine or in any other capacity, as suggested by an anonymous comment on the Vendor Alley blog.
“The biggest story regarding Remine is the MLS executives and board members who are investors and paid advisors pushing their product. It is no accident that Remine has 39 unnamed investors they will not disclose (very rare for a VC backed business),” the commenter, screen named “RealEstate101,” wrote.
“At my MLS it is whispered that two of our board members are investors and they push Remine constantly. This is a material conflict of interest to brokers and agents these executives and board members represent and agents should demand that MLS board members and executives certify they are not investors in Remine (individually or through a corporation) before they make decisions on what MLS software we will be using. ”
Schacknies said Remine has more than 100 private investors, most of them from the real estate space. He said he was not going to individually research the backgrounds of all 100-plus investors, but that he knows that none of them have been MLS executives or MLS board members in the past three years that Remine has been in existence.
“I know who our primary points of contacts are at MLSs and we don’t have a single investor who is from an MLS,” Schacknies said.
Venturing into Canada
Schacknies declined to share the names of Remine’s investors for confidentiality reasons. He said Remine does have an MLS exec investor in Canada, but Remine has not partnered with her MLS.
“There’s no business dealing with her in any way, shape or form. And the same is obviously true on the state side,” he said.
“It was an arm’s length transaction,” he added.
Inman reached out to the Canadian MLS exec, who asked that Inman not use her name. She said, “I wouldn’t want to create an optic that is not true. The fact that Remine is not yet in the Canadian market doesn’t mean it won’t be. [I] want my membership to be able to to evaluate it on its merits.
“My investments do not and should not impact the value proposition that we provide for members. I would not want my personal decisions to bias my organization’s decision over what the best thing is for Realtors. I don’t want it to be a material impact whether my organization chooses Remine.”
She said that if her organization were to consider partnering with Remine that she would disclose it to her board of directors and recuse herself.
The MLS exec said she heard about Remine at a hackathon she was asked to judge years ago. Remine was known as “Real Deal” at the time.
“I really liked what I saw. I liked that they had a fresh vision of how the real estate professional could be empowered to motivate the transaction,” she told Inman in a phone interview.
The Canadian market is disadvantaged when it comes to technology because it’s so much smaller than the U.S., she added.
“It’s not as sexy to look at the Canadian market as a huge … profit-generating opportunity. As an industry, it’s incumbent on us to see what’s out there as opposed to them coming to us,” she said.
She declined to say how much she had invested in Remine, but said she invested before the company was live in any market, around late 2016 or early 2017.
“Let me put it to you this way, in the context of Remine I would be a very small blip. Maybe not even a blip,” she said.
She thought it would be a great place to see her personal investment grow, she added. “I believed in them and thought it was a good opportunity.”
Asked whether she knew of other MLS executives who had invested in Remine, she said, “I have no idea.”
Remine does have another prominent Canadian investor, Brian de Schepper, who is also on Remine’s board of directors. De Schepper was director of MLS and industry relations at Zillow until March 2017, according to his LinkedIn profile.
“He is not at Zillow Group and he is now an investor. No other Zillow Group employees or staff or anything are investors at this company. We have no business relationship of any kind with Zillow,” Schacknies said.
He emphasized that de Schepper is a Canadian citizen and resident and Remine would “very quickly” be launching a Canadian version of Remine.
“[De Schepper] has not attracted any MLS advisers. We don’t have any. We have over 100 individual investors. The vast majority of them came from the three of us founders’ Rolodexes because we’ve been in business for many years and have been very successful at making investors good returns. And we have their trust and they were the ones who financially supported us in the first few years,” he said.
“Did any investors influence our MLS success? The answer to that is categorically absolutely not,” he added.
MLS execs scared
Schacknies declined to say which other MLSs Remine has signed contracts with other than those displayed on Remine’s website. He said MLS executives need to control the messaging and timing of disclosing the relationship.
“Because of the incumbents — who quite frankly in many cases they’re scared of — [MLS execs] say things like, ‘Is it okay if we don’t tell anybody?'” Schacknies said.
“For example, with MLS 2.0 I can share with you that we have very deep penetration and we’re very likely going to not make those announcements until end of the year for the obvious reasons that these incumbents have nothing to do but to go into extreme defense mode. That information doesn’t serve anyone’s purpose other than for theirs, so we like to keep that stuff confidential, as do our MLS partners.”
He said he doesn’t know exactly what MLS executives are afraid that their current MLS system vendors will do.
“These are very long-term relationships and they want to be sensitive. They don’t want to create any more problems than already exist. And obviously the transitions are going to be painful for people. And so we’re trying to make it as easy as possible,” he said.
“Fundamentally the agents and brokers have been using systems now for 10 years and it’s second habit and now it’s going to change. So you approach that delicately and make sure that it is smooth,” he added.
Upselling to agents
In a blog post, Michael Wurzer, president of MLS system vendor FBS, contended that Remine is more focused on upselling its lead prospecting products to agents than creating an innovative MLS system.
“The reality is that, as much as Remine might want to claim they’re creating MLS 2.0, to me it looks like they’re really trying to use the MLS to monetize the tools they want to sell to agents,” Wurzer wrote.
“In my experience, that’s going to be a tough sell to a lot of MLSs, who are pretty sensitive about their MLS vendors pounding away at their agents with marketing and sales tactics.”
Schacknies told Inman he hadn’t read Wurzer’s post in full, but that Remine’s business model is not a secret.
“Our business model, which … is very publicly known, is that our enterprise revenue is below the traditional levels because rather than the old-school model where an MLS would have to subsidize their entire membership, we deliver a more interesting solution where agents can kind of self-select what features are interesting and relevant to them,” Schacknies said.
“It’s a much more flexible and modern business model. So, you know, it is what it is. We’re proud of that fact. We believe that it’s part of our value-add to the MLS to provide them with flexibility.”
Asked whether Remine is building an MLS system in order to upsell to agents, Schacknies said, “All we’re trying to do is deliver innovation to the space. We were all former Realtors and we felt that the tools and technologies that were made available to us primarily by the incumbent players were completely lackluster. Out of pure frustration, we built our own tools. We ended up showing it to MLSs and partnering with them and frankly, leveling up the profession, which I think everybody agrees it so desperately craves.
“So for the incumbents to hold on to the good old days of 20 years ago, let the people choose. Go ask a public poll of Realtors and ask them what are their favorite systems. I think at the end of the day, that’s all that really matters.”
As for upselling to agents, he said Wurzer has it backwards.
“Our MLS partners are actually the ones who promote the product and share with their members all this new innovation and frankly very proudly showcase us as some of the value that they’re now offering their agents,” Schacknies said.
“I haven’t read the blog post but I think he misunderstands. He’s interpreting it something as a bad thing when in fact it’s that very thing that got the MLSs so excited about us.”
Remine affirms resources to launch new MLS system
Schacknies also clarified that, despite rumblings that Remine might not have enough cash to make it for the long haul, the company was prepared to build its new MLS system and support its adoption.
Remine has raised $48 million total so far, including its $30 million Series A round announced earlier this month. About $9 million of the $30 million was debt converted to equity in the form of a convertible note — many of those 100-plus private investors were represented in that note, according to Schacknies. (A total of 39 investors participated in the Series A, according to a public filing.)
But he said the company only received that $9 million a few months apart from the $21 million in equity lead by New York-based growth equity firm Stripes Group.
“The question is whether or not we have cash and the answer is yes. And more importantly, do we have a business plan that is sensible and sustainable? The answer is absolutely,” he said.
Below are the Remine MLS partners Inman reached out to who stated that no one affiliated with their MLS was a Remine investor:
- Alaska MLS
- Arizona Regional MLS (ARMLS)
- Bright MLS
- California Regional MLS (CRMLS)
- Charleston Trident MLS (CTMLS)
- Conejo Simi Moorpark Association of Realtors (part-owner of Ventura County Regional Data Share)
- First MLS (FMLS)
- Georgia MLS
- Gulf South Real Estate Information Network (GSREIN)
- Hawaii Information Service
- High Desert Association of Realtors
- Houston Association of Realtors (HAR)
- Miami Association of Realtors
- MIBOR Realtor Association
- Mid America Regional Information System (MARIS)
- MLS PIN
- Multiple Listing Service of Long Island/New York MLS
- My Florida Regional MLS (MFRMLS)
- Northern Nevada Regional MLS (NNRMLS)
- North Texas Real Estate Information Systems (NTREIS)
- RAPB + GFLR
- Rhode Island Association of Realtors (RIAR)
- San Francisco Association of Realtors (SFAR)
- Triad MLS
- Ventura County Coastal Association of Realtors (part-owner of Ventura County Regional Data Share)
MRIS Investors, which previously belonged to a predecessor to Bright MLS, also said neither the company nor anyone from the company was an investor in Remine.
Greater El Paso Association of Realtors and Northwest MLS did not respond to requests for comment.
Editor’s note: This story has been updated to add Alaska MLS to the list of MLSs who have told Inman that no one affiliated with their MLS is a Remine investor.