Why Redfin is hungry for acquisitions

Brokerage raising $239M for technology and acquisitions

TRD NATIONAL /
Jul.July 17, 2018 11:15 AM

Redfin’s Glenn Kelman (Credit: Redfin)

Online-centric brokerage Redfin is seeking to raise up to $239 million, deploying the funds on acquisitions and technology.

“Redfin may choose to use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies or other assets,” the company said in a statement Monday. The brokerage noted that it has no such “agreements or preliminary plans” at this time.

Redfin is raising money through a combined stock and debt offering. The company said it is selling 3.5 million shares of common stock and $125 million aggregate principal amount of convertible senior notes due in 2023. Neither offering is contingent on the completion of the other. Redfin is also offering the stock underwriters a 30-day option to purchase up to an additional 525,000 shares. The underwriters of the notes will have a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of notes.

Last year, the discount brokerage went public in a much-anticipated IPO. Since then, the company has poured money into hiring and advertising — leading to a $36.4 million loss during the first quarter of 2018. But the advertising push helped boost its market share to 0.73 percent, up 0.15 percentage points year-over-year, the company has said.

Still, shares of the company have slumped about 26 percent this year. Redfin has also joined the house flipping trend. Through its “Redfin Now” program, the company buys homes and flips them. The program saw $3.1 million in revenue in the first quarter.

In June, rival Zillow said it was looking to raise $650 million — also noting it may use some of the proceeds for “acquisitions of, or investments in, other businesses, products or technologies.”

Though others in the real estate tech space like Zillow have made a number of acquisitions, Redfin hasn’t followed that model. Its only known acquisition was Walk Score in 2014.


Related Articles

arrow_forward_ios

Real estate stocks push up this week as U.S.-China trade tensions ease

Eric Gordon

Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world

Big Tech locations in NYC

MAP: Here’s a look at all the Big Tech locations in NYC

From left: RealPlus' Eric Gordon, Corcoran's Pam Liebman, Halstead's Diane Ramirez, Douglas Elliman's Howard Lorber and Brown Harris Stevens' Bess Freedman (Credit: Eric Gordon by Emily Assiran, Getty Images, Halstead, BHS, iStock)

Terra sells part of RealPlus stake to Corcoran and Elliman

Joel Schreiber (Credit: Shir Stein and Wikipedia)

WeWork’s first investor used his stock as collateral. Now his lenders are suing him

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Meet WeWork’s new co-CEOs

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

arrow_forward_ios