Zillow is acquiring HotPads for $16 million in cash.
Zillow is a real estate marketplace that lists “practically every home in the U.S.” It can be used to find homes for sale, apartment rentals, market records, mortgage rates, statistics, and even advice. Like any enterprising real estate mogul, Zillow has been on a buying spree, snatching up startups to expand and improve its offerings. The HotPads purchase marks Zillow’s sixth acquisition in less than two years.
HotPads’ map-based real estate search engine is known for its split screen search interface that lets visitors view multiple listings side-by-side to make comparisons. Of the millions of visitors to HotPads, almost 70% were looking for rentals. This fits into Zillow’s recent launch of Zillow Rentals, which offers a suite of tools for rental professionals.
“This acquisition represents a significant step-change for Zillow Rentals, allowing us to dramatically increase the number of leads we send to landlords,” said Spencer Rascoff, CEO of Zillow. “HotPads has a younger, complementary and rental-focused audience. Now Zillow will become even more relevant to consumers at the beginning of their real estate life cycle.”
This is Zillow’s first acquisition of a primarily consumer-facing company. Earlier acquisitions include Mortech, Inc; Buyfolio; RentJuice, Diverse Solutions, and Postlets.
There are mixed sentiments about Zillow’s future within the technology community. While the company had a strong third quarter with $27.8 million in revenue and saw 36 million unique visitors in October, a recent report from research firm Citron undermined investor, share-holder, and consumer confidence.
HotPads will not only supplement Zillow’s rental offering but will also help build out its mobile presence. Zillow recently launched the Rentals for iPhone app and saw record mobile usage in Quarter 3. HotPads’ five mobile applications will “complement Zillow’s growing rental marketplace.” HotPads will also serve to bolster Zillow in its competition with Trulia, another real estate listing company.
HotPads has 19 employees and is based in San Francisco, where it will remain even though Zillow is based in Seattle. Read the press release.