Zillow raises $25M, joins ranks of bigger Web 2.0 companies

July 24, 2006 | Michael Bazeley | Comments | |
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Zillow.com, the controversial online real estate company that provides value estimates on homes, has raised $25 million in a second round of funding.

It is controversial because it pisses off lots of real estate agents, who think providing values is their job.

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Rich Barton

This venture round reminds us of the Jobster funding last week: Like Jobster, Zillow is a Seattle Web 2.0 company that has some momentum, and is striking deals with big players. Zillow signed a deal with Yahoo last week, which made it the provider of home estimates for Yahoo Real Estate. It is non-exclusive, and leaves the door open for Zillow to cut a deal with Google, MSN or others — though Zillow has been mum on that prospect.

The round was led by investment fund PAR Capital Management, which joined previous investors including Benchmark Capital and Technology Crossover Ventures (TCV). Zillow has raised $57 million to date — very similar to the $50 million Jobster has raised. This is now getting into the realm of serious cash amounts. There are only a handful of Web 2.0 companies — at most — that have managed to raise so much.

Zillow was founded last year, but first launched its site in February 2006. It has 118 employees. Since launching, it has been among the top-ten real estate sites, with an impressive two to three million unique visitors a month. It provides price values on nearly 67 million U.S. homes.

Rich Barton, Zillow co-founder and chief executive, told us the company will focus on improving the quality of the data that informs its estimates, and will also roll out a number of other features unrelated to housing valuations, which he is keeping secret for now.

The company is not profitable yet. He said he did not need the cash, but that he chose to raise the money anyway. The best time to raise money is when you don’t need it, he said.

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  • charles
    Oops. Why do you have Trulia's logo posted here?
  • k
    trulia's lovin' you guys - zillow? not so much!
  • ahem. fixed.
  • I remember reading a research report by Mary Meeker during the bubble that referred to Homestore.com (HOMS) as one of the four horseman of the new internet economy. OOPS.

    Seeing some of these new rounds is absolutely sending a chill down my spine as a public investor. Where's the exit strategy? I would love to know the post money valuation Zillow got for this round. Wow.
  • Mitch
    Can you explain to me what makes Zillow a web 2.0 company? Better yet, maybe you could explain what Web 2.0 is?
  • Mitch,

    Check out these links. Zillow has been taking some of the latest (3D) mapping features, giving users a new way to search for homes. They are integrating home values, maps and search.

    http://www.zillow.com/search/Search.htm?mode=browse

    http://www.zillowblog.com/zillow_blog/2006/04/zillow_homes_in.html

    Meanwhile, here's a good definition of Web 2.0: http://en.wikipedia.org/wiki/Web_2.0
  • To answer you Mitch:
    Web2.0 has not yet any official definition.
    Some talks about technologies, some about sociology, some about philosophy...

    This is why a year ago a lot of people thought it was only a buzz word.

    But if you look closer at Gartner's Hypecurves you can see that the Internet is knowing a new growth trend. So Web2 must not be a mere "buzz".

    Talking about the term itself you can check Tim O'reilly's definition (the first one and best one in my opinion). Wikipedia, Dion Hinchcliffe or Techcrunch are other references to check on that matter.

    To make it easy, Web2 is all about collaboration and sharing; networking has also to do with it.

    To conclude: Internet1.0 used to be a long cylinder of which you could only access the first slice (like 20% of it); with Web2 Internet is becoming a sphere of which you can access any single point at any time in a second (100% of available content).

    Zillow is about Web2 in its content because it is providing different kind of services. You can also check at the Map & Search page: this is very Web2 in my opinion.
  • John Butz
    Do you hire Senior Citizens with Real Estate licenses in Fl. ?

    Can I invest in the company?