A tech firm David has taken its next step towards becoming Goliath.
Perchwell, a real estate data company that works with MLSs, brokers and agents, has raised $25 million in a Series B financing round led by VC firm Lux Capital. Lux contributed roughly half of the capital raised, according to co-founder and managing partner Peter Hébert.
The other investors included names not typically involved in growth-stage financing, including Barry Sternlicht’s real estate investment firm Starwood Capital Group and several multiple listing services such as California Regional MLS and Stellar MLS.
“Any time industry embraces not just with words, but capital, that’s a very strong signal,” Hébert said. Hébert, whose firm also invested in a $15 million Series A financing round for Perchwell in 2021, will join the tech company’s board of directors.
Perchwell CEO Brendan Fairbanks said the capital will go towards implementing artificial intelligence in a way that will reduce the time agents spend gathering information, instead allowing them to be a “high-level adviser” for clients.
Hébert said that he thinks Perchwell is already “the leader and winner” when it comes to product, and he sees the next steps for the company as winning clients from competitors like CoreLogic and Black Knight.
“While they have had this market position for literally decades, they have done nothing to empower their customers or to focus on solving real problems,” Hébert said.
The focus on national competitors marks another step for Perchwell, who initially made waves when it took over Sotheby’s International Realty’s backend listings system from long-time NYC data provider RealPlus in 2018. Perchwell has also inked deals with brokerages like CORE, Engel & Volkers and Leslie Garfield.
Perchwell took over the backend of the Real Estate Board of New York’s residential listing service in 2021, replacing Stratus Data Systems. That switch caused a kerfuffle among the established players that lost out on the bid, like RealPlus, or weren’t given a chance to compete, like On-Line Residential, another listings technology company.
Now looking past its city of origin, Perchwell has already made inroads with some of the largest MLSs in the country.
At the end of 2023, Perchwell and California Regional MLS announced a beta test powered by Perchwell that would provide services like listing submission, property searching and market analysis for a select group of users. Perchwell also announced a partnership with ReColorado in 2023, another MLS that participated in this investment round.
Neither Hébert nor Fairbanks provided target dates to go public, but Hébert said that his goal was to create a multibillion-dollar, publicly traded company, which may take a “decade or more.”
Hébert also sits on the board of real estate virtual realty firm Matterport, which went public via a special-purpose acquisition company in 2021.
“We truly believe that you will be rewarded by solving real market pain points and delighting your customers,” Hébert said. “That’s just something that I think has largely been a foreign concept in this industry since inception.”
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