How on earth did people buy houses before the Internet? It’s one of those things I just can’t wrap my head around—like how people booked flights before the Internet. What did they use?! A phone?!
Proving that the real estate business is shifting to an online model, Redfin announced Thursday that it has raised $14.8 million in a round of funding led by Globespan Capital Partners, with help from previous investors Madrona Venture Group, Vulcan Capital, Draper Fisher Jurvetson and Greylock Partners. The new capital brings Redfin’s total raised to nearly $46 million.
The company says it will use the funds to launch in new cities and ramp up R&D.
Redfin has had a stellar ride so far, despite an anemic economy and an even weaker housing market. Since launching in 2006, Redfin has facilitated the sale of more than $6 billion in homes and claims to have saved customers an average of $7000 in commission per transaction.
The company could not be reached for comment, so no word on its users or how it’s doing revenue-wise.
By comparison, Zillow, which went public in July, reported $15.8 million in revenue in the second quarter—more than double what it made the year before—with net income of $1.6 million compared to a $2 million loss the previous year. Additionally, unique monthly users nearly doubled to 20.8 million.
But unlike other online real estate services like Zillow, Trulia, Estately, and Realtor.com, Redfin is the only one that combines online real estate search and brokerage services.
"Globespan invested in Redfin for one big reason: service," said Globespan Managing Director Venky Ganesan, in a statement. "We had used the site extensively, and talked to customers, so we knew that this was one of the few companies that could deliver consistently higher-quality service than any of its competitors.”
Redfin added in its announcement that a full 97% of its customers said they would recommend Redfin to their friends. And while the service remains popular primarily among first-time home buyers and sellers, the over-45 crowd is quickly becoming the company’s fastest growing segment.
Image source: redfin.com