One of the fastest-growing online real estate companies, HouseValues, is being rewarded for its success with a new dose of venture capital. The Bellevue, Wash.-based company this week raised $14.5 million in investment funding from William Blair Capital Partners.
HouseValues provides online marketing services to real estate agents and has been growing steadily since its inception five years ago.
The latest round of capital adds more evidence to HouseValues’ success in the online real estate space. The company has grown to 180 employees, has earned $25 million in revenue last year and is on the path to report $45 million in revenue this year.
Although HouseValues CEO Ian Morris declined to talk about the funding, he offered some insight on what has helped the often guarded, private company grow to 10,000 realty agent subscribers in just five years.
Morris said HouseValues’ map for success encompasses four key parts: the fact that every home buyer or seller request goes to only one agent; the company’s prospecting management tools that help agents automatically cultivate relationships with consumers; the coaching and training provided to agent subscribers; and the flat subscription fee model that enables agents to keep what they earn on every deal.
“That’s our secret sauce,” he said.
The company has two separate operating brands. The first, HouseValues, provides home seller leads to realty agents who purchase the territory where the prospect is selling their home. The company in January launched a second, separate service for buyer leads, JustListed.com.
Prospective home buyers and sellers who sign up for the services receive free home price valuations or for-sale listings information from participating real estate agents. Their contact information is forwarded to the agent who purchased the region where they are either selling their home or plan to buy.
HouseValues attracts home buyers and sellers to its services through aggressive television advertising.
Morris said the JustListed service already is responsible for a “good chunk” of the company’s growth, with 3,000 total realty agent subscribers and close to 100,000 consumer requests each month.
“Our certified HouseValues agents now earn more than twice as much as the average Realtor,” he said.
He credits agent success for HouseValues’ success.
“In the end, that is what fuels our growth,” he said.
Last year HouseValues purchased SOAR Software Solutions, a technology company that specializes in auto prospecting e-mail products and virtual office Web site applications. SOAR is available in about 65-70 percent of the country. The company has vendor agreements with MLSs to facilitate agents’ use of SOAR software with the MLS data.
The JustListed service includes a free subscription to a SOAR Solutions product that sends automated e-mail messages with listings data from the agent to the buyer prospect. The SOAR component is included only in areas where the local MLS is equipped to facilitate the agent’s use of the SOAR technology. Agents in other regions can still use JustListed, but they have to use another automated system or a manual search-and-compile system to retrieve and send the listings information to the buyer prospects.
Morris joined HouseValues as EVP of marketing and business development, was soon named COO and was promoted to CEO after his first year with the company. The Harvard Business School graduate is a longtime pioneer in the online real estate space. He joined HouseValues two years ago after seven years with Microsoft, where he most recently was general manager of the company’s real estate business.
HouseValues and JustListed are sold on a territory basis. Price points start north of $100 and average several hundred dollars per ZIP code or neighborhood per month. The prices vary depending on how many leads the territory is likely to generate and the company guarantees a minimum number of leads to the purchaser. All the leads are exclusive.
The company’s services for agents also include a complete Market Leader leads management system, training and coaching.
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