After launching out of TechStars Boston back in 2011, Cambridge-based real estate marketing platform Placester has raised $2.5 million in seed financing in a round led by new Boston seed fund, Romulus Capital, with participation from other angel investors. Founded in 2009 by a former real estate agent, Matt Barba, the service helps realtors launch their own websites.
During TechStars, the startup was originally designed to help realtors with online advertising, but that soon changed. “Helping real estate professionals promote their listings online through syndication was our initial focus,” explains Barba. “However, we quickly learned that the vast majority of real estate professionals don’t have anything to promote,” he says. “Essentially, they didn’t have a website. We learned there was a much more fundamental problem to be solved: Helping real estate professionals establish themselves online.”
Barba understood first-hand the difficulties realtors faced in putting their data online, including data access fees, paperwork, technical challenges, and more, because of his own background in real estate. Realtors have to pull their data from MLS (Multiple Listing Service – the regional entity where real estate professionals enter and store homes that are available for sale or rent), then pay for an IDX integration allowing customers to search their listings. This can be expensive because there are 900 U.S. MLSes, and the information retrieval methods for these are not standardized.
“This difference is one of the main contributing factors to the cost of creating a platform that allows real estate professionals to establish an online presence,” Barba says. “Additionally, most MLS’s charge fees to help offset the cost of purchasing the MLS software from third party vendors, and to provide additional services to the MLS’s agent membership. These fee’s aren’t overly burdensome to large brokerages, but can often be in the hundreds of dollars, which can be overwhelming for individual agents who are just starting to invest online,” he adds.
These challenges lead to customers finding that a lot of realtors’ websites had out-of-date listings, which is a poor experience. Meanwhile, the existing website providers often caused problems of their own: they were slow to deliver, or used out-of-date technology, for example.
Built alongside co-founder Frederick Townes, formerly the CTO at Mashable.com, Placester addresses these problems by offering a platform where realtors can create their own maintenance-free websites in around five minutes. The sites are based on WordPress, optimized for SEO, and are mobile and tablet-friendly.
For individual real estate agents, a single package includes set up, hosting, and MLS fees. Instead of relying on a third-party solution, Placester built its own technology to retrieve and update the MLS data on the fly, which helps keep the websites current.
Offered as a freemium service, paid users ($45/month) also have access to the MLS search capability, search-indexed listing pages, premium themes, customer support (phone and email), and more. Today, the company covers around 85 percent of the MLSes across the U.S., and is expanding. There are “tens of thousands” of realtors on Placester, Barba says, but declined to provide exact figures. Hundreds have converted to the paid product launched around five months ago, and user growth is 20 percent month-over-month.
Also participating in the financing round were David Anderson, David Cohen, Angel Street Capital, Adam Berrey, Bob Mason, Josh Summers, Jennifer Lum, TechStars, and other Boston investors. The round was raised in three tranches with $800,000 closed right after TechStars, $650,000 about six months later, and another $1 million closed today.
Now a sixteen-person team, the company plans to use the additional funding to add more themes as well as grow its MLS coverage to 95 percent. Also in the works is a formal partner program, which will open up the platform for others to build on.