Zillow to acquire HotPads
Zillow today announced plans to acquire map-based rental and real estate search site, HotPads for $16 million in cash, with all 19 employees staying on the team, marking Zillow’s sixth acquisition in less than two years, and its first acquisition of a consumer-facing product. HotPads boasts nearly 2.8 million unique visitors in October, 70 percent of which viewed rental listings.
Zillow launched in January 2005, and just four short months later, HotPads launched in San Francisco, both offering national real estate search. Zillow’s strength has long been residential real estate search, while HotPads has done well to dominate rental search, despite both offering full search.
Instant complement to Zillow’s growing portfolio
The addition of HotPads is an instant complement to Zillow’s growing rental marketplace, and is eye-catching, as HotPads has long been an extremely lean startup with slow growth, reminding fellow startups that sometimes turtles do win the race.
Last month, Zillow launched Zillow Rentals, leveraging their acquisition of RentJuice, and with the addition of the HotPads assets, Zillow is making their play for rentals clear, which is perfectly timed with the National Association of Realtors’ report that vacancies continue to fall as rents rise in a landlord’s market, so capturing rental searchers’ attention is paramount in a tight market.
Also in the last two months, the company acquired Buyfolio to strengthen their mobile offering, and mortgage technology Mortech providing software tools to the mortgage industry, after acquiring IDX company, Diverse Solutions and listing syndication product, Postlets in years past.
Zillow breaking their own records
Earlier this month, Zillow reported record mobile usage, hitting one billion homes viewed year-to-date, and a peak of 37 million unique users in July, hitting a record total revenue of $31.9 million, up 67 percent year-over-year, while subscription-based Marketplace revenue nearly doubled year-over-year to $23.6 million.
Zillow also reported record quarterly net income of $2.3 million and record quarterly adjusted EBITDA of $7.6 million, representing 24 percent of revenue.
What’s next for Zillow?
With all of these acquisitions, Zillow is making its goals clear: dominate residential real estate search, rental search, and real estate technology tools for real estate professionals.
There are gaps that remain in Zillow’s offering, for example, customer relationship management, document management, and other Realtor-centric tools like voicemail services, as well as lacking more robust offering for the mortgage sector (despite the recent acquisition of Mortech), so their next step remains to be unseen.
With the velocity of their acquisition plays for talent and technology, all eyes are on Zillow.