Durable Capital Partners is run by former T Rowe Price investment manager Henry Ellenbogen. “In chaotic times, he understands our long-term commitments,” Redfin CEO Glenn Kelman said.

Redfin has reached an agreement to sell a $110 million stake in capital stock to Durable Capital Partners, a late-stage venture capital firm based in Maryland, the brokerage announced Monday.

The proposed sale, according to a filing with the U.S. Securities and Exchange Commission, is set to consist of $70 million of common stock priced at $15.61 per share — the company’s stock opened Monday at $15.85 per share — as well as $40 million of convertible preferred stock.

The convertible preferred stock will pay an annual dividend of 5.5 percent and has a conversion price of $19.51 per share — and will convert at Durable Capital Partners’ option automatically after three years or if Redfin’s common stock closes above $27.32 for 30 consecutive days.

Henry Ellenbogen, a former investment manager at T Rowe Price, founded Durable Capital Partners in 2019. According to Redfin CEO Glenn Kelman, Ellenbogen has a long history with Redfin.

“Durable’s Henry Ellenbogen has been leading investments in Redfin since 2013, when we were a private company and the market was recovering from the great financial crisis,” Kelman said in a statement. “In chaotic times, he understands our long-term commitments to our culture and our technology and why those commitments position us to take share in a housing market that is being transformed by this pandemic to be more virtual, convenient and efficient. We’re proud to be his partner.”

The move comes at a time when real estate markets are being slowed by COVID-19 — and even halted entirely in some markets. Redfin, in response to the slowdown, has cut executive and headquarters employee bonuses to raise agent compensation in anticipation of the spreading slowdown. Kelman himself plans to take no salary for the rest of the year.

Email Patrick Kearns

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Refer friends to Select and get $200 in credit.Register Here×
Connect Now is less than one week away. Prices go up May 30.Reserve your seat today.×