After getting its legs with backing from investors including Google’s venture capital arm, agent matching service HomeLight has raised an additional $3 million in funding and launched a new website.
Drew Uher, CEO, HomeLight
The startup, which guides homebuyers and sellers to real estate agents based on their performance statistics, says it will use the funding to drive additional growth of its platform, which covers 75 percent of the U.S. population, CEO Drew Uher said.
“Zillow and Trulia have done a great job in home search, but there are still several problems yet to be solved,” said Todd Kimmel, managing partner of Montage Ventures, which contributed to the funding round. “HomeLight is positioned well to innovate not just the way people find agents, but also the way the industry works more broadly.”
Uher said HomeLight’s platform has closed over 700 transactions. The startup typically earns a referral fee of 25 percent from agents who close deals with leads they receive from the service, he added.
The investors that participated in HomeLight’s latest raise were Bullpen Capital, Montage Ventures, Crosslink Capital, Krillion Ventures, 500 Startups and Western Technology Investment.
HomeLight’s success in more than doubling its funding highlights the growing momentum of services that pair consumers with agents based on their transaction histories, despite such websites’ tendency to rankle some agents.
The new round of funding “is a great vote of confidence in our ability to revolutionize the way people buy and sell homes,” Uher said in a statement.
The funding round comes shortly after research engine FindTheBest began surfacing agent performance data on its real estate portal, findthehome.com.
Agent Ace, perhaps HomeLight’s biggest competitor, has also helped raise awareness of the concept of choosing an agent based on performance statistics.
Agent Ace announced in August that it would power an agent matching service on U.S. News & World Report’s website, not long after revealing that it had clinched in $6 million in funding.
In announcing its latest funding round, HomeLight has also launched a new website that features enhancements to its search algorithm, additional content, and a new look and feel.
Uher said the new design has greatly improved the user experience for consumers, but declined to provide details on changes to its algorithm or content.
“All I would say is that we’re constantly assessing if we’re showing the most relevant results to our clients and working on ways we can improve the algorithm,” Uher said.
The latest raise brings HomeLight’s total funding to date up to $4.85 million. HomeLight launched out of beta in 2012 with $1.5 million in funding from Google Ventures among other investors.
Services that help find agents by making performance data searchable — including efforts mounted by realtor.com operator Move Inc. (ListHub’s parent company), Redfin, the Houston Association of Realtors and NeighborCity — have all met resistance from agents, who have complained that the statistics associated with them are not always accurate, or are incomplete.
HomeLight is no exception.
Shortly after the startup’s official debut, the site pulled down agent transaction data at the request of two multiple listing services. Both MLSs claimed that HomeLight was not authorized to use the data in the manner that it had, despite its membership to both.
If consumers are able to search for an agent by the number of listings they currently represent or have sold in the past, new agents or agents who are members of teams may be at a disadvantage, critics of agent matching sites have said.
To tackle the problems posed by teams, HomeLight has developed features such as the ability for agents to upload additional transactions to their profile, Uher said.
While HomeLight used to collaborate with real estate agents only through referral agreements, the company told Inman in August that it had begun co-listing and co-representing consumers with real estate agents.
Agent Ace takes the same approach.
Under such arrangements, Agent Ace lets partner agents handle all traditional, hands-on real estate services while ensuring that they provide “very basic fundamentals,” such as returning phone calls on time, Agent Ace Mazen Fawaz previously told Inman.
Co-listing and co-representing may help companies make the case that they should qualify for MLS membership, which may be crucial to obtaining the data necessary to power their services in many markets.
A 2008 settlement between NAR and the U.S. Department of Justice defined a qualified MLS participant as “actively endeavoring” to “list real property of the type listed on the MLS and/or to accept offers of cooperation and compensation made by listing brokers or agents in the MLS.”