What CoStar wants, Redfin gets
The battle lines have been drawn on rental listings.
Taking on the likes of Zillow and CoStar, Redfin struck a deal to buy RentPath for $608 million, the company said Friday. Yes, that’s the same RentPath that called off a $588 million sale to CoStar last year, after federal regulators blocked the deal on antitrust grounds. With Redfin, there are no such concerns since Redfin is new to the rental game.
During an investor call, Redfin CEO Glenn Kelman said one-third of Americans are renters, and to dominate the listings game the company needed to add rental inventory. (RentPath owns Rent.com, Rentals.com and ApartmentGuide.com, and averages 16 million monthly viewers from those sites.)
“The websites that are ahead of us as real estate destinations have rentals,” he said. “We don’t. The only way to climb that mountain is by building that inventory.”
But CoStar isn’t backing down.
While it may have lost RentPath, it’s fighting tooth-and-nail to win CoreLogic — a residential real estate data company that would massively boost CoStar’s muscle in that market.
After losing out to Stone Point Capital and Insight Partners, which agreed to pay $6 billion, CoStar came back last week with a $6.9 billion offer.
In a letter to CoreLogic’s board, CoStar CEO Andy Florance said he was stunned CoreLogic went with Stone Point and Insight. He cited reports that Stone Point secured $5.5 billion in debt to finance the deal. “If true, that implies leverage of over ten times,” he said, “a crushing debt load, with potentially devastating consequences.”
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Tracking proptech SPACs
Blink and you’ll miss a new SPAC.
With billions of dollars flowing into blank-check firms, a growing number of real estate players are targeting proptech.
Last week alone, Scott Rechler’s RXR Realty launched a $250 million blank-check firm; Silverstein Properties’ Tal Kerret and Charles Federman (who co-founded Silvertech Ventures) began raising a $250 million SPAC; and Zillow co-founder Spencer Rascoff announced his third SPAC (which is raising $250 million).
As an alternative to the traditional IPO, special-purpose acquisition companies made a comeback last year with 248 blank-check firms going public, raising $83 billion, according to SPACInsider. As of Feb. 19, 160 SPACs have gone public so far this year, raising $48.3 billion.
The Real Deal is now tracking proptech SPACs, so bookmark this page and make sure to come back for updates.
States Title adds $150M to warchest
States Title, a startup that’s taking on the arcane title insurance industry, has raised $150 million in debt. HSCM Bermuda, a prior backer, provided the financing, which will give the startup “greater capacity to tackle this enormous market,” CEO Max Simkoff said in a statement.
Founded in 2016, States Title uses machine learning to speed up the title process (and by extension, closings). The latest financing follows a $123 million funding round in May 2020, which valued the company at $623 million. States Title said it will use the debt to optimize its available cash and launch new technology.
In addition to HSCM Bermuda, prior investors include Greenspring Associates, Fifth Wall Ventures and Foundation Capital.
STAT OF THE WEEK
63%
First-day stock pop for tech IPOs in 2021, double last year’s average, per Dealogic
Renting a desk for less
Part of WeWork’s turnaround includes lower prices.
The flexible-office firm slashed prices for desks and small offices in November and in January, according to Bloomberg News. Discounts ranged between 5 percent and 25 percent, with an average discount of 10 percent. Although the discounts weren’t advertised on WeWork’s website, they were found within its source code, according to an analyst who compiled the data for Bloomberg.
CEO Sandeep Mathrani has been getting WeWork back on its feet after its failed IPO in 2019. WeWork has cut costs and is evaluating underperforming locations.
But the office backdrop is uncertain. Office rents have dropped, and according to CBRE, they could drop 7 percent more by 2022 before rebounding.
Knock, knock. Is the landlord home?
Knock, a startup that bills itself as the “front-office tech stack” for apartment landlords, has raised $20 million in growth equity to roll out new products like virtual touring and leasing.
The round, led by Fifth Wall Ventures, brings its total funding to $47 million. Previous backers Madrona Venture Group, Lead Edge Capital, Second Avenue Partners and Seven Peaks Ventures also participated in the round.
Based in Seattle, Knock’s core product is a customer relationship manager (CRM) for multifamily owners. It was founded in 2014 by Tom Petry and Demetri Themelis.
Using Knock’s software, property owners can manage correspondence with prospects and stay on top of calendar items — from showings to renewals. “Every operational touch point is managed within Knock,” Themelis said.
Small bytes
? Metropolis, an AI platform for parking lots, raised a $41M Series A led by equity firm 3L. Starwood Capital, former Twitter CEO Dick Costolo and RXR Realty are also investors.
? Eden Health, which has worked with flex-office startup Convene to provide in-office healthcare, raised a $60M Series C.
? Opendoor launched iBuying in San Diego and Asheville, North Carolina.
? InTheMarket, an office leasing startup, is looking to raise a $2M seed round through crowdfunding.
? Audience Town, a real estate ad company, landed $2.1M in seed funding.
? Realm, which evaluates a property’s potential value, closed a $3.2M seed round.
? Leasecake raised $3M to expand its software, which helps businesses manage work spaces.
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