Just three years after buying startup RentJuice for $40 million, Zillow decided to shut the rental broker service down in favor of focusing its attentions on property managers and landlords.
The service, which became known as Zillow Rental Pro under Zillow’s auspices, was launched by entrepreneur David Vivero in 2009 as a way for rental brokers to browse listings and for brokers and property managers to display listings and easily perform credit and background checks.
When the acquisition by Zillow was announced in 2012, RentJuice wrote to its users, “Having a well-financed and growing company like Zillow behind us will also allow us to invest heavily in our product and support teams to deliver powerful new innovations for you.”
But Zillow’s promotion of the platform was apparently not as robust as hoped. In December of last year, the company announced that it would be phasing out the service, and it was officially discontinued on May 1.
“While we have a passionate and dedicated set of users, the adoption of our tools has not been high enough for us to justify continued support of our Zillow Rental Pro product,” the company said in a statement at time.
“We now serve landlords and property managers of all sizes through our many rental tools and services, including Zillow Rent Connect and Postlets,” a Zillow representative told The Real Deal today.
Vivero, who has since founded a healthcare startup called Amino, declined to comment for this story.
Caren Maio, founder and CEO of Nestio, a competing residential services database focused on New York City, said that Zillow Rental Pro suffered from accuracy issues and did not tailor its services to the nuances of individual markets.
Jordan Sachs, CEO of residential brokerage BOLD New York, who was pitched by RentJuice and Zillow Rental Pro several times, echoed these concerns. “They built this ship really quickly with no way of powering it,” he said, explaining that instead of focusing on connecting with landlords, RentJuice seemed to rely largely on email blasts and the like, supplementing it with “bells and whistles” that meant nothing alongside unreliable information.
“Zillow had a history in itself of being inaccurate,” he added. “Both two companies combined kind of had similar faults.” Brokers expressed similar quality concerns after Zillow acquired popular New York listings site StreetEasy in 2013 for $50 million. And Zillow has taken a lot of stick for its automated property value estimates, known as “Zestimates.”
But not everyone believes it was a quality issue that led to the shutdown. Joe Charat, CEO of listings service Naked Apartments, believes that Zillow simply deprioritized RentJuice in favor of focusing on other services.
This is at least the second recent instance in which Zillow has acquired a startup only to let it wither and die.
Also in 2012, Zillow purchased BuyFolio, a service that facilitated sharing and discussing listings with a friend or a group. The product became known as AgentFolio under Zillow. But in March of this year, it was also discontinued.
The next acquisition on fragile footing appears to be Market Leader, a real estate operating system that was acquired by Trulia in 2013 for approximately $350 million, before Zillow acquired Trulia. While the company has not made anything official, a transcript of a recent earnings call reveals that Market Leader could soon be phased out.
“As you know, we are conducting a strategic review of Market Leader’s operations and evaluating its place within Zillow Group’s overall strategy,” Zillow CEO Spencer Rascoff said during the call. “While we continue to support the CRM product for agents and enterprise partners, we are not actively selling those products to new clients.”
Zillow did not immediately respond to a request for comment about its plans for Market Leader.