Online-centric real estate brokerage Redfin today announced that it has raised an additional $70.9 million in an effort to expand into new markets. The round was led by two large institutional investors, Wellington Management and Glynn Capital Management, with participation by Priceline chairman Jeffery Boyd’s Brothers Brook and Redfin board director Bob Mylod’s Annox Capital, as well as Tiger Global Management and a number of funds managed by T. Rowe Price. According to CrunchBase, Redfin had raised $95.7 million in seven previous rounds, including a $50 million Series F round in November 2013.
“Redfin will put this capital to good use,” said Redfin CEO Glenn Kelman in the announcement today. “As our business grows, our agents can be more local, and our ability to get people into homes quickly increases. With more market-share, we can pair buyers and sellers more efficiently. We have already seen this happen over the years in our most established markets, but now we can invest in accelerating that process in new markets.”
Redfin is currently active in 48 U.S. markets — up from 22 two years ago when it last raised funding. Given that it’s a full-blown brokerage firm (unlike some of its competitors), expanding into new markets means the company has to set up operations there, hire agents (which aren’t working on commission but get a salary) and integrate data from the local MLS service. In the process, it has to deal with the arcane rules that still govern real estate transactions.
In markets where it is allowed to do so, it refunds up to half of the buyer’s agent fees. The company says its agents have now closed over $20 billion in home sales.
Over the years, Redfin solely focused on building out its own operations, but earlier this year, it made its first acquisition when it bought Walk Score. With the new capital in hand, chances are we will see the company make more of these small acquisitions in the future.