I listened to Greg’s Listing Bits podcast with Victor Lund the other day. Here’s the episode for the curious folk:
Homesnap recently raised a $14 million Series B. Like Greg, I really wonder how those VCs are ever going to get their money back if the brokers who own 50% of the Broker Public Portal joint venture with Homesnap can nix any acquisition.
Let’s play out this scenario. Homesnap succeeds in growing traffic, they have trouble monetizing (they need a massive sales force to compete against Zillow and Move, and that sales force will cost a lot of money to build and grow), Zillow Group comes calling with an attractive acquisition offer. The brokers don’t want to sell. Homesnap (and their VCs) do, because there are very few, if any, other exit options on the horizon. Do the VCs simply let the brokers keep running Homesnap independently? I seriously doubt VCs would invest in a company in which a collective of industry insiders could reject any exit option they didn’t like. Is the joint venture agreement between Broker Public Portal and Homesnap available (either publicly, or to the brokers who invested in BPP)? I’d be curious to see the legal language around acquisition options/control/decision-making. Anyone with inside intel on this, feel free to leave a comment or send me an email.
Doesn’t this just sound like Realtor.com all over again? Maybe Homesnap will sell to Move?
As an aside, I get that this is an industry play, but winning consumers is the only way to change the balance of power. With “agents” being the core constituent BPP/Homesnap are serving (see below screenshot), I still struggle to understand how they are going to get consumers to use Homesnap instead of the known alternatives buyers already use. If consumers are not finding Homesnap early on (prior to speaking to an agent), I don’t see a mechanism for the company to generate considerable revenue. That’s very different than driving traffic from onetime MLS system emails agents are initiating.