It has been a long dry spell. But a Seattle Internet company is finally getting ready to take the IPO plunge. Zillow.com, the fast-growing online real estate company with more than 19 million monthly unique visitors, today filed documents to go public.
We actually heard rumblings of the IPO filing late last week, but never could quite nail it down with our sources. Now, the S-1 is on file, which you can peruse here.
According to the filing, Zillow plans to raise up to $51 million through the IPO.
Zillow’s primary rival, San Francisco-based Trulia, also has been discussing its plans to go public. The two companies have been locked in a fierce competition in recent months, with Trulia CEO Pete Flint offering some choice comments about Zillow on GeekWire.
Interestingly, today’s filing by Zillow doesn’t mention Trulia by name, but as is customary it does offer a typical disclaimer about competition.
Our success depends on our ability to continue to attract additional consumers to our website and mobile applications. Our existing and potential competitors include companies that operate, or could develop, national and local real estate and mortgage websites. These companies could devote greater technical and other resources than we have available, have a more accelerated time frame for deployment and leverage their existing user bases and proprietary technologies to provide products and services that consumers might view as superior to our offerings. Any of our future or existing competitors may introduce different solutions that attract consumers or provide solutions similar to our own but with better branding or marketing resources.
We’ve been watching closely to see which company would file first, and I am sure the Trulia team is digging into the filing as we speak.
Zillow.com doesn’t have huge revenues, just $30.5 million last year. And the company showed a net loss last year of $6.7 million, which was half of the loss that the company listed in 2009.
The 6-year-old company touted that it had reached profitability last fall, but at the time it was unclear whether it would hit that milestone for the full year. It will certainly be interesting to see how the markets reacts to a company — which despite nearly doubling sales last year — is still losing money on an annual basis.
Founded by former Expedia executives Rich Barton and Lloyd Frink, Zillow is now led by 35-year-old CEO Spencer Rascoff. He took over the reins last fall, and since then the former Expedia executive has hinted at the possibility of an IPO.
Barton remains executive chairman, while Frink serves as vice chairman and president.
The company is one of the most heavily-funded Internet upstarts in the Seattle region, having previously raised $87 million in venture capital from Benchmark and others.
As part of the public offering, existing investors, including Technology Crossover Ventures, have agreed to purchase $5.5 million worth of stock at the IPO price.
Shares of Zillow are split into class A and class B shares, and Barton and Frink maintain tight control over the voting shares with 87 percent control. According to today’s filing, Barton owns 31 percent of the class A stock, while Frink owns 30 percent. Technology Crossover Ventures also holds 30 percent, while Benchmark maintains a 19 percent stake and Par Investments has an 11 percent stake.
However, each venture firm has less than five percent of the voting power. The company pointed out the dual class stock structure in today’s filing, writing that Barton and Frink will have “significant control” over board appointments, corporate transactions and asset saales.
Mr. Barton and Mr. Frink, as the holders of Class B common stock, together will be able to control all matters submitted to our shareholders for approval. This concentrated control may limit the ability of holders of our Class A common stock to influence corporate matters for the foreseeable future, and might harm the market price of our Class A common stock by delaying, deferring or preventing a change of control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquirer from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock.
The last technology company to go public in Washington state was Bellevue-based Motricity, which issued shares last June. It raised $50 million at the time.