Real Estate Site Goes Public

April 19, 2011 / Russell Legato, Residential Property Analyst

Real estate site filed for an Initial Public Offering (IPO) in the Securities and Exchange Commission (SEC) on Monday, April 18, 2011.

Real Estate Site Goes Public

Zillow has been edging towards an IPO for some time. Zillow’s revenue grew significantly over the past three years with a whopping 74% percent ($30.5 million) growth last year that was largely driven by the company’s increase in market revenues. The revenues included subscription fees for real estate agents and advertising sold to mortgage lenders, along with charges for lenders to participate in the company’s mortgage marketplace.

Even though the gains, the company is still losing money but it is declining significantly from $12.9 million in 2009 to $6.8 million in 2010.

The underwriters of the proposed deal are Citi, Allen & Company, Needham & Company, ThinkEquity and First Washington.

Three investment groups are expected to gain the most from the filing. At present, Class A common stocks are held by Technology Crossover Ventures (TCV) Fund (30%), Benchmark Capital (19%) and Par Investment Partners (11%) while Class B common stocks are solely held by Rich Barton (55%) and Lloyd Frink (45%), the company’s co-founders, which gives them a 10-to-1 vote advantage over other stockholders.

In 2010, Zillow created the biggest real estate advertising network in the industry in partnership with Yahoo Real Estate. This fall, it had another partnership with Chicago-based to create a comprehensive national database of apartment listings.

Other sites that heated up the public offering market this year were LinkedIn and Demand on January, Pandora on February and soon this Friday, April 22, 2011, Renren, a Chinese networking site.

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