"Tech gives Redfin operating leverage & marketing efficiencies. They are above 95%+ of traditional brokerages"
Redfin is doing well in the public markets since its debut last week, with the tech-powered real state brokerage trading near $25 per share and now valued at around $2 billion.
And one innovator in the online real estate industry is watching the progress closely.
In a 19-part Tweetstorm, Trulia co-founder Pete Flint, who sold his company to Zillow for $2.5 billion in 2015, yesterday offered some interesting (and flattering) thoughts on Redfin and its prospects to disrupt the real estate industry.
Interestingly, Flint — who stepped off the Zillow Group board earlier this year, but remains a long-term shareholder in the company — said that Redfin’s IPO “is a far more important moment for real estate industry than Zillow or Trulia IPOs.” He also warned that Redfin’s emergence on the public markets will “force the traditional real estate industry to up its game and “become more professional & innovative,” something that will cause some short-term pain in the mid-term, but will eventually be good for the industry.
Flint also touched on the debate of whether Redfin is a real estate company or a tech company, an issue we explored in this GeekWire story just prior to the Redfin IPO. (As Flint notes, Redfin now commands a value more than RE/MAX).
Here are Flint’s full remarks from Twitter:
4/ The core business is clearly a successful model, as demonstrated by the thousands of profitable brokerages in the US.
5/ Tech gives Redfin operating leverage & marketing efficiencies. In tech they are head & shoulders above 95%+ of traditional brokerages
6/ $RDFN valuation at roughly $2BN is shocking traditional RE, more valuable than 44 yr old RE/MAX and almost half a Realogy, the Goliath
8/ Key $RDFN challenge is the business is highly seasonal & cyclical. Redfin is potentially even more exposed with employee agents costs.
9/ A public Redfin is like flying an overcrowded plane in a tropical storm. U might reach yr destination but guaranteed a very bumpy ride
10/ Also, how important is the quality of the agents vs the tech? While I'm a major tech investor, I've seen how real estate transactions...
11/ ...are fundamentally driven by people supported by tech, not the other way around. However millennials are changing the landscape her...
12/ Traditional agents have many amazing tech tools available from zillow and other tech companies.
13/ The Zillow & Trulia IPOs were the nail in the coffin for traditional RE media - newspapers, will Redfin do the same for brokers?
14/ The basic RE transaction hasnt changed, is slow, expensive & frustrating, innovation wont come from incumbents. Change inevitable
15/ The Redfin IPO as with any major competition will force the RE industry to up it's game and become more professional & innovative
16/ This will be good for everyone from consumers to top agents to brokerages, but will come with a bunch of pain mid term.
17/ Tech & online mktg investments & innovative transaction models in the RE industry are set to substantially increase. A good thing.
18/ It's early days for a public Redfin, but without doubt their IPO is a good thing for the entire industry & consumers.