At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.
CoStar, the parent company of consumer home search portal Homes.com, is set to acquire Matterport, the industry leader in the creation of digital twins, the computer-rendered, interactive 3D versions homes used in web-based touring. The deal is for $2.1 billion, Inman reported on Monday.
The acquisition may not immediately trigger the seismic industry reaction that occurred when chief rival Zillow bought ShowingTime. But when you think about what CoStar can do with Matterport, it just might.
TAKE THE INMAN INTEL INDEX SURVEY FOR APRIL
For example, I believe CoStar can move quickly to democratize the digital twin by allocating future blocks of Homes.com’s $1 billion ad campaign to influence consumers to think a fully immersive 3D tour is the only way to get the most value for a home. It can then advance Matterport’s mobile capabilities to make it easier than ever to publish its experience to the homebuying public.
Inman reached out for comment from CoStar on this matter but didn’t hear back in time for publication. We will update this story if we do.
The companies were already working together on Homes.com’s “Listing of the Future” initiative under its rental brand, Apartments.com. It’s an enhanced rental listing feature clients can add onto listings with photos of specific units, 3D tours, walkthrough videos, the view from the unit and more.
A new perspective for Matterport
In addition to its commercial property products, Matterport has long marketed its residential home-tour tech to agents, who are largely resistant to purchasing and learning to use one of its cumbersome cameras unless they’re marketing a luxury listing or doing so at the request of a particularly demanding seller.
Largely, it’s hard to sell technology to individual agents, something to which many proptech software founders will attest. This is why enterprise brokerage deals are so coveted by the few companies large enough to support them. Matterport has partnerships in place with Engel & Volkers and the 2,500-agent JP & Associates, both deals formed in 2020.
It’s also why multiple listing service partnerships and franchise partner networks are so sought-after, they help small companies get in front of a lot of agents. This helps startups avoid the many millions of dollars it costs to determine their best customer, and then craft a message that reaches them.
Real estate industry innovators need to first go to the consumer to build buying and selling solutions and then give them to agents and brokers, a strategy I’ve been advocating for the past few months. Homes.com can execute that with Matterport.
Homes.com’s reach as a portal provides Matterport’s benefits to countless eyeballs, an immense, home-starved audience eager for a new way to see what’s happening in adjacent neighborhoods or far-off markets.
The timing couldn’t be better. Nationwide, buyers are waiting, scrolling for months to see what may fall into their price range, community or lifestyle requirements. Matterport’s digital twins are interactive and informative, giving viewers tons of compelling insights about a home that can’t be realized in text or still photos.
If the reaction to the NAR settlement and the lawsuits that spawned it have proven anything, it’s that a large contingent of licensed agents don’t understand what consumers expect when buying and selling. This is evidenced by the collective denial in comment sections of articles about the bombshell cases and in an Inman Intel survey that showed brokers weren’t concerned about the impact of the legal proceedings until NAR opted to settle.
Inman contributor Nick Schlekeway pointed out a number of industry practices that surfaced in the recent court cases that neglected consumers’ best interests in favor of what was best for the practitioner, such as cooperative compensation requirements and agents openly not sharing listings with less than “market rate” commission.
Far too many agents and brokers see business technologies as an expense, not an investment in creating a better business. Matterport, however, is now in the hands of a company that has all the consumer attention its billion-dollar campaign can buy — which is a lot.
If Homes.com can successfully show consumers what their home can look like in a Matterport viewer, more agents might consider stockpiling a few Pro3s.
In the same way that Zillow can use showing information (times, dates, location, price, buyer demographics) to improve everything from its Zestimate to what house features are gaining the most attention, Homes.com can cultivate the acres of data resting in Matterport server farms to better its products, too. Room measurements. Home contents. Interior finishes. The amount of time viewers spend in each room. It all becomes powerful metadata when collectively fed into consumer-facing marketing campaigns.
What makes Matterport right for this moment
In the past couple of years, Matterport has released a number of marketing options for agents in an effort to expand its position and brand in the overall marketing ecosystem.
In February of this year, Matterport released Listing Intelligence, a product built to leverage data within published 3D tours for additional marketing assets and information dissemination. It includes automatic room-by-room labeling and dimensions, color-coded and company-branded floor plans and property reports for fully detailed physical listing insights.
It also includes a “Make Offer” call-to-action button inset on the initial screen of a tour, placed alongside the listing agent’s graphical business card. The Make Offer button is an ideal way to capture formal interest from a prospect by linking it to a general term sheet, mortgage preapproval form or other critical information needed to get a deal underway.
Last February, the company announced Digital Pro, a marketing program that includes its most well-known home-tour product with dollhouse view, 25 or more high-end still photos, a static 2D floor plan and a 10-15 second preview reel, all delivered within two business days. These marketing options are very similar to Zillow’s Listing Showcase, which provides a floor plan, high-res imagery and prominent listing agent details.
And don’t forget that in 2022, Matterport scooped up media company VHT Studios specifically for its real estate marketing products.
At the time of the acquisition, the companies said in a joint statement that “seven of the top 10 brokers in the United States are customers of VHT Studios” for their listings. I don’t know if those seven stuck around after that deal. If they did, it’s now a Homes.com statistic.
There’s no question this is a direct response to the entry of Zillow’s Listing Showcase in the portal wars — a loud, bunker-busting assault to loosen Zillow’s grip on consumer web traffic, which has been lobbed back and forth between the two as the definitive demarcation line of victory.
The portal wars are real, sports fans.
Welcome to Thunderdome.
