Online real estate broker Redfin is preparing to sell shares to the public, filing on Friday to raise up to $100 million.
Goldman Sachs is leading the IPO for Seattle-based Redfin, which specializes in buying and selling homes and uses a mobile app to do tasks like schedule home tours and suggest listings.
Revenue in 2016 jumped 43 percent to $267.2 million from $187.3 million a year earlier. The company’s net loss narrowed to $22.5 million from $30.2 million. Redfin calls itself a “technology-powered real estate broker,” and it’s the human element that leads to a gross margin of 31 percent, much lower than most big internet companies.
In its prospectus, Redfin differentiates itself from other tech companies that just use the internet and mobile apps to connect consumers with businesses.
“In an age when the technology economy is increasingly divided from the rest of the world,” the filing says, “we have hired our own real estate agents, not as a disposable labor force, but as partners in this business, with a salary, health-care benefits and the opportunity to earn stock options.”
Technology investors like Madrona Ventures, Greylock Partners, Draper Fisher Jurvetson and T. Rowe Price backed Redfin, which was created in 2004.
Redfin CEO Glenn Kelman, who joined in 2006, told CNBC in May that the company’s sales were being limited by historically low inventories of homes.
“We’re going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch,” Kelman said.
The company’s larger competitor Zillow is located just up the road in Seattle. Zillow is more than three times the size of Redfin by revenue and valued at about $9 billion.
— CNBC’s Diana Olick contributed to this report.
Source: Tech CNBC
Redfin files to raise 0 million in an IPO as the online real estate broker takes on Zillow