Placester, $27 million dollars, and the changing vendor landscape
“Ravi Viswanathan, a general partner at NEA, told me his firm likes to invest in companies that play in massive markets where the spend is in the billions of dollars and the industry still often uses arcane methods. Real estate is an obvious example for this and the power of the local listing services means there is also a substantial barrier of entry — one which Placester managed to overcome early on.
The big money entering the market has been changing the landscape of vendors in real estate. It all really started with The Borrell Report, which pegged a somewhere between a $9 billion to $27 billon opportunity up for grabs in the online real estate space. That got the V.C.’s attention, whether you agreed with the numbers or not.
First Zillow, then Trulia and others. When Zillow bought Trulia things only heated up (Dotloop, Reesio, etc).
These new breed of vendors are young, smart and have piles of cash (via Venture Capital). Here’s a list of what I would qualify as New Breed Vendors and who’s lunch they want to eat.
Lunchtime: Zillow saying they don’t want to be an MLS/Broker/Franchisor is just like Uber saying they don’t want to be a taxi company. Lately they want to focus on “Super Agents” or “teams” that have systems in place to consume and convert leads (so they buy more).
Lunchtime: Placester is going after agents via partnerships with N.A.R., KW, RE/MAX Integra. Come one come all. With their reasonable (cheap?) pricing models they can bring agents in their eco-system and upsell them on other services. Any small/medium sized IDX/agent website/CRM vendors (Top Producer, too many to name, etc.) should be on alert.
Lunchtime: I see these guys competing in about the same space as Zillow. High end agents and teams. They are just going at it differently by pitching themselves as a full service marketing firm to agents (copywriting, ad management, reporting, websites, IDX, etc.)
Lunchtime: Boston Logic is going after enterprise broker deals. Companies like Real Estate Digital (Now owned by Nationstar aka Solutionstar aka XOME), IDC, might be (will be), feeling some pain in this space.
Lunchtime: These guys are going after more tech savvy agents and teams. But they also integrate their tech into other agent software solutions.
These are players that will drive consolidation, make big moves, and push forward change in the industry. It easy to see, you just need to follow the money.
…and if you don’t know, now you know.