Redfin has faced more difficulty attracting capital than CEO Glenn Kelman originally anticipated, he tells The Wall Street Journal.
At the root of investors’ ambivalence towards Redfin is the high-tech broker’s use of sales associates. To many tech investors, “people don’t scale,” WSJ said.
But Kelman insists that Redfin’s human touch, like the successful taxi company Uber, will be a key ingredient to future success.
Last month, Redfin teamed up with investors that share that vision, raising $50 million in a funding round led by Tiger Global Management LLC and by portfolios managed by T. Rowe Price Associates Inc. Kelman acknowledged that the funding round is viewed as setting the company up for an initial public offering.
“Whereas Redfin’s bizarre, half-fish, half-reptile combination of its own technology and its own real estate agents had earlier made venture capitalists fret about our business model — it takes forever to hire enough real estate agents to cover the country and you have to pay them a big chunk of your profits — Tiger and T. Rowe Price just saw a unique opportunity to deliver the most customer value,” Kelman wrote in a blog post on the funding round.