Get ready for some more M&A activity in the real estate sector. This morning, the real estate search engine Trulia announced that it is looking to raise up to
$100.3 million $150 million in a follow-on offering, with “some or all of such net proceeds to acquire or invest in complementary businesses, products, services, technologies, or other assets.” Trulia went public last year, and currently has 23.6 million monthly active users. Update: today’s follow-on filing is an amendment that includes the partial release of some shares owned by “certain officers and directors of the company” that were previously locked up. A spokesperson says that it is for $150 million, with $100 million going to company reserves.
In a filing with the SEC, the company said it would be offering some 5.25 million shares in a primary and secondary offering. 1.75 million of those shares will come from selling stockholders, and 3.5 million will come from Trulia itself, with the $100.3 million calculation based on its $30.44 per share price as of March 8 on the NYSE. It also notes that the raise could be as high as $115.4 million “if the underwriters’ option to purchase additional shares in this offering is exercised in full.” It also notes that the follow-on offering altogether could raise as much as $164 million.
The only other major acquisition from Trulia was a move to enhance the usefulness of its real-estate search service by making it more social and interconnected with other aspects of local life. In 2010 it bought Movity, a Y-Combinator alum and specialist in geodata that also had created a service to track local check-ins. It was still in stealth mode at the time.
A spokesperson for Trulia noted in an email that two-thirds of the proceeds, or $100 million, “will go straight to the company’s cash reserve.” He also added a bit more color on what acquisitions might mean:
“The follow on offering is for the company to build a bigger cash reserve to accelerate the growth of the business. As a company, we will continue to be very thoughtful and disciplined in our approach to putting our capital to work. The purpose of raising additional capital is to strengthen our cash reserves and balance sheet, so we can execute on growth opportunities as they arise, such as mergers and acquisitions, partnerships and funding new product initiatives.”
In a market very crowded with real-estate startups and several bigger players, Trulia has been slowly ramping up the functionality of its service beyond straight listings. Last week, the company introduced a recommendation engine called Trulia Suggests to improve personalization features on the site. That service uses an algorithm that you seed with some of your preferences, and then it combines that with your browsing history on Trulia itself to suggest properties to you.
At the same time that Trulia is forging ahead in these kinds of moves to improve engagement and use of its services, the company needs to drive more revenue-generation for its bottom-line results. In February, for the second quarter of reporting as a public company, Trulia posted a net loss of $1.59 million, or a loss of $0.03 per share. That was down by around $1 million compared to a year ago, when its net loss was $2.5 million. Revenues were up by 75% to $20.6 million.
Trulia gives home buyers, sellers, owners and renters the inside scoop on properties, places and real estate professionals. Trulia has unique info on the areas people want to live that can’t be found anywhere else: users can learn about agents, neighborhoods, schools, crime and even ask the local community questions. Real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via our hyper local advertising services, social recommendations and top-rated mobile apps. Trulia...