Esho Ventures
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Esho Ventures

Closer look at the Zillow result — insights for PropTech start-ups

We cast our eye over the Zillow result this week after the company reported some solid earnings numbers. Zillow’s stock price is breaking new highs and up almost 30% over the past few months. The combined market value of the company is now close to US$5bn.

I could have written about REA Group or Fairfax (which currently looks like its subject to some corporate activity, with Domain the key asset). But I didn’t.

I focused on Zillow is because of the huge publicity the business has been given since launching its Premier Agent advertising solution. Effectively, Zillow lets buyer’s agents take place alongside sale listings. Not everyone is happy, particularly in New York where I spent some time in February talking to agents in and around Manhattan.

Zillow owns StreetEasy, which is New York focused, among other brands. Giving buyer’s agents placements alongside sales agent listings makes sense, but is somewhat an unorthodox approach. Many listing agents, particularly in New York, have threatened to boycott. The numbers tell an interesting story.

As a PropTech business, Zillow is important case study because it shows:

  1. The real estate industry can at times be set in their way, resistant to change and often behind many other industries which have embraced technology a lot quicker.
  2. Many have written off Zillow’s market cap, value and place in the market as another classified platform. But its ability to support buyer’s agents, with real B2B sales solutions, has proven many critics wrong.

So as I cast my eye over the impressive numbers, I note the following:

3. Revenue grew 32% for the first quarter, operating earnings up 22%. This thing is growing, taking market share and innovating new services which the market clearly needs. It’s also investing in its future. Big tick.

4. 180 million unique visitors came through their sites in the first quarter, 9 million more than last year. #PropTech is real, significant, huge and at a very early stage.

5. Zillow research shows millennials represent the largest home buying segment and make up about half of all first time homebuyers. They often shop for homes using technology, and are more likely to find their agent online. Highlight this!

6. Premier Agent revenue (the thing many dinosaurs in the industry have been in up roar about) grew 30% to US$175m. It now represents more than 70% of total group revenue. It’s not going to go anywhere!

There are some good lessons here for #PropTech start/scale-up businesses. Just because it hasn’t been done before (eg. Premier Agent), it doesn’t mean there isn’t a huge underlying demand in the market.

Run a PropTech business? Start/scale-ups can Apply for investment by visiting We’re targeting PropTech investments at the $1–5m post-money valuation range.



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