Trulia to acquire Market Leader for $355 million
If you thought that Trulia, Zillow and similar real estate websites were merely free online resources to let you snoop on the value of your neighbor's property, think again.
Sure, they still let you do that. But the real money is in the transaction, and these properties sit squarely on an industry that's worth an estimated $27 trillion globally.
San Francisco's Trulia announced this morning that it has entered into an agreement to acquire Washington State's Market Leader, which makes software-as-a-service products for real estate agents, for an eye-popping $355 million.
The acquired company's software is a one-stop-shop for agents, allowing them to find new contacts, manage the ones they have and market to them. If it sounds familiar, that's because it's effectively a customer relations management (CRM for short) tool tailored to the sector. Which is, of course, all about the sale.
In other words, there's plenty of money to be made from companies, agents and regular people like you and me, and that's precisely why Trulia has struck this deal. (How much? Almost $24 billion was spent last year real estate-related marketing in the United States, according to estimates. Yowza.)
Chief executive Pete Flint writes that the arrangement "will result in a combined platform that creates value for the entire real estate market, from consumers to brokerages, agents and franchisors, and will create the most comprehensive end-to-end solution across multiple technology platforms in the real estate industry today." Which is, I'm sure, exactly how he would have said it in person.
Nonetheless, Market Leader—which will become a subsidiary of Trulia—gives Trulia more real estate brokerage and franchisor contacts (to whom they can sell productivity tools and industry data), agents (to whom they can sell lead generation) and consumers (to whom they promise faster responses from agents).
The acquiring company indicated earlier this year, through a massive sale of its stock, that it seeks to grow at a rapid clip. "We plan to pursue acquisitions of complementary businesses and strategic partnerships to help us execute on and accelerate our growth plans," it said in an SEC filing. Market Leader is a big step toward that.