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eCommerce - Wednesday, July 18, 2007

Online Real Estate Broker Redfin Gets Its Final Round

The hard truth is that while real estate brokers tend to be very nice people who seem to work hard - they better to be to get any business - clients resent them for sticking it to them with onerous commissions. So companies like Redfin have a big advantage as they enjoy word of mouth marketing from people who dream of sticking it to their brokers.

Today, Seattle-based online real estate broker Redfin has raised $12M in Series C led by Draper Fisher Jurvetson. Redfin has raised $20.8M in total VC funding since its 2002 inception. Redfin says this should be the last round that it needs to raise as it is already profitable in 6 cities and its model shows that it requires just 6 months to get profitable in cities that it launches in.

Redfin just launched in Washington DC and has plans to open in Chicago this year. Since Redfin's last round of financing in May 2006, it claims to have completed more than $350M in real estate transactions, saved its home-buying customers nearly $6M in commissions, and increased revenues by more than 2,000%.

Redfin's online real estate broker model is to refund two-thirds of its commission to home buyers and offers a flat listing fee of $3,000 to sellers. It operates in Seattle, San Francisco, Boston, San Diego, Orange County and LA.

Redfin CEO Glenn Kelman says of the new round: "Redfin wooed DFJ somewhat unsuccessfully over the course of a year; but it was a zealous customer who arranged the initial meeting; which we traveled to by plane, train and bicycle; demonstrating a website that had only been launched the day before; resulting in a closing that took just a few weeks."

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