Profitable and growing, Redfin raises $10 million from Greylock |
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Profitable and growing, Redfin raises $10 million from Greylock
Redfin has reeled in $10 million in fresh financing in a deal led by Greylock Partners, the venture capital firm behind companies such as Facebook, Farecast and LinkedIn. Total financing in the Seattle online real estate broker now stands at $30.8 million.
Redfin's existing investors -- Madrona Venture Group, Draper Fisher Jurvetson, Vulcan Capital and The Hillman Company-- also participated. Chief Executive Glenn Kelman said the fresh round of capital will bolster the company's finances as it heads into 2010, allowing it to expand faster.
Redfin -- which just upgraded its Web site last week -- said that its business is doing well despite the rocky economic climate. During the past 12 months, the company said that revenue exceeded a $20 million yearly run rate and it generated its first profits.
Site visits increased 200 percent, and since the company was founded more than $2 billion in transactions have flowed through the company.
I asked Kelman why he wanted to raise the money now. Here's what he said:
"Yeah we’re profitable now, but we needed the money all the same, because we've been running all year with diddly in the bank. Diddly is no problem when you have five folks on the payroll, but it's nerve-wracking when you have 100. We could have easily slipped up come January and February and been in a real jam. We'll keep running the business out of the cash register, but just having a margin of error will allow us to open markets faster, and to place a few big bets."
The new cash will be used to invest in research and development as well as to expand into new markets. The company recently listed on its Web site that it plans to offer service soon in Portland, Atlanta and Phoenix.
It currently offers its real estate service in Seattle, Boston, Chicago, New York, LA, Orange County, Sacramento, San Diego, San Francisco and Washington D.C.
Homebuyers who use the service receive a 50 percent commission refund, with the average refund to homebuyers who use a Redfin agent coming in at $7,500.
James Slavet, a partner with Greylock and former operating executive at Yahoo and drugstore.com, joins Redfin’s board of directors.
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