Real estate kingpin Zillow has acquired StreetEasy, a go-to New York real estate listing service with over 1.2 million unique monthly visitors. The $50 million sale gives Zillow a local presence to leverage the market in New York City, one of the largest and most concentrated real estate markets in the world. StreetEasy, for its part, can now access better financial liquidity to invest in R&D and product development.
Both sites share a lot in common, mainly by offering searchable listings that can be narrowed down through a variety of filters, such as neighborhood, school district, access to public transportation, and price.
Founded in 2006, StreetEasy is a small company at 34 employees. Though it launched with an original focus on New York City, its biggest market, it has since expanded into a number of other areas such as Washington D.C. and Philadelphia.
“Simply put, StreetEasy has cracked the code in New York,” said Zillow CEO Spencer Rascoff . “They now have a local network effect where nearly every New York broker is active on StreetEasy because of the site’s large audience and comprehensive data.”
Though a press release on the deal did not detail how the acquisition will be structured, it appears the company will continue StreetEasy in its present form, which makes sense considering the website’s sizable presence already established on the real estate market.
“At StreetEasy, we pride ourselves on bringing much-needed transparency to the New York City real estate marketplace, and being the primary reference site for consumers and real estate professionals,” said Michael Smith, co-founder and CEO of StreetEasy. “We’re very excited to be joining forces with Zillow, the largest national brand in mobile and online real estate, as we continue our commitment to data integrity, innovation and collaboration with the local real estate community.”
The deal provides the real estate giant with a solid foothold in a valuable market, but came with an expensive price tag for an audience of just over a million monthly unique visitors. Yet it further solidifies Zillow’s hold on the real estate market as the real estate giant faces rising competition as the US market rebounds. Its competitor Trulia, an online residential real estate listing site covering markets across the country, applied last March for its own $150 million follow-on offering to be used for growth and acquisitions.
The deal will likely be the first of several, as Zillow announced plans to file for a similar follow-on of public stock just as the deal with StreetEasy was announced. The company will seek to sell 2.5 million shares of Class A common stock, equivalent to around $228 million based on Friday’s closing share price of $91.22.
Just a few weeks ago, Zillow reported record second quarter revenue of $46.9 million, a 69 percent increase over the same quarter last year. It also reported a loss of $10.2 million, mostly due to marketing and acquisition expenses.