Zillow, the controversial website that gives value estimates of people’s homes and other real estate info, has raised a significant $30 million of funding, despite the mortgage industry credit crunch.
The Seattle company has now raised a hefty $87 million in total funding during its short lifetime, making it one of the most richly backed of the new era of “Web 2.0” Internet companies.
The round was led by Legg Mason Capital Management. Previous backers Benchmark Capital, Technology Crossover Ventures and PAR Capital all participated.
Opened in early 2005 by the founders of Expedia, Zillow started out as a portal for information about homes around the country. Over time, it has added on sales components for owners and real estate agents, and also provides a place for buyers to discuss or ask questions about a property.
Only last month, we reported that competitor site Redfin had landed $12 million in funding, led by Draper Fisher Jurvetson. Trulia, the other main player in the Web 2.0 real estate space, pulled in $10 million in May. Terabitz, started by a teenager, raised $10 million in July (our coverage).
Asked whether this most recent funding round has anything to do with the real estate slowdown, chief financial officer Spencer Rascoff told me that there was no relation. Rather, it had to do with the company’s focus on employing plenty of skilled developers and improving the site.
The country’s real estate troubles may indirectly benefit the Zillow, though; real estate agents desperate to sell homes are far more likely to post their offerings online, sacrificing some control in exchange for having more people see their properties.
Since Zillow introducing them last year, home listings grown impressively, going from a couple of thousand at the end of 2006 to nearly 300,000 at present. About 85 percent of the listings are posted by real estate agents, and the remainder by home owners.
The other half of Zillow’s business, ad revenue from its website, doesn’t seem to be growing nearly as fast. In February, the site received 4 million unique visitors; by August, that number had grown to 4.4 million. Rascoff said that the site had lost some “voyeuristic viewers” who stopped ogling homes on the site as the real estate bubble deflated, and are gradually being replaced by confused buyers and sellers looking for solid information.
The company’s strategy going forward is to add more features for users to talk about specific properties. Another initiative, a service called EZAd, seeks to capture part of the local ad market by selling ads in areas; a plumber in Manhattan, for example, could pay $10 for a thousand viewers who entered one of the district’s zip codes to see his ad.
Currently staffed by 155 people, some 100 of which are developers, Zillow will add on about two dozen more people during the next year. It has no plans to take further funding.