Zillow to acquire StreetEasy for $50M
Purchase gives Zillow strategic access to NY market
Online real estate marketplace Zillow (Z) continues its ambitious expansion effort, with the planned acquisition of New York real estate website, StreetEasy, for $50 million in cash.
The deal, which is expected to close in the next few weeks, pulls StreetEasy and its 1.2 million unique visitors – most of whom are New York home shoppers – under the Zillow umbrella.
To commemorate the big purchase announcement, Zillow's executive leadership, co-founder and employees will kick-off Monday trading by ringing the Nasdaq opening bell.
The transaction allows Zillow to grow its overall audience share, pulling in homebuyers from one of the busiest real estate markets in the nation.
"StreetEasy is an excellent strategic fit with Zillow, as we share a common goal: To help consumers become smarter about real estate by communicating comprehensive, unbiased information about apartments and homes," said Zillow CEO Spencer Rascoff. “StreetEasy is an incredibly strong and recognized brand in New York City, and complements Zillow’s dominant and growing national brand."
So what is StreetEasy and what does the firm bring to Zillow?
StreetEasy is seven years old and currently has 34 employees. The firm offers New York real estate shoppers a comprehensive listing of for-rent and for-sale properties through strategic partnerships with New York real estate brokerages.
StreetEasy also holds web traffic by offering detailed information on condos, co-ops, new developments and luxury real estate throughout New York.
The acquisition of StreetEasy is not the only big news out of Zillow Monday.
Zillow plans to launch an underwritten public offering of 2.5 million shares of Class A common stock, while an additional 2.53 million shares of Zillow Class-A common stock will be offered by existing shareholders.
Proceeds will be used for general corporate purposes and may be deployed to invest in other technologies or complimentary businesses, Zillow said.
The company will not receive proceeds from any of the shareholders' stock sales.
Zillow is expanding at a time when traffic is up. The company's second-quarter earnings show July traffic breaking existing records with 61 million unique visitors on the site, up 66% from last year. Mobile traffic also doubled from last year, with 321 million homes viewed from mobile devices, according to the latest Zillow data.
About 60% of Zillow’s traffic now comes from mobile devices.