Zillow has entered into an exclusive agreement to power the U.S. home shopping experience for Leju, a Chinese subsidiary of E-House Inc. that’s in the process of spinning out through an initial public offering. The profitable company, which posted revenue of $335 million last year, plans to trade on the New York Stock Exchange.
Last month, Chinese Internet giant Tencent invested $180 million in Leju for a 15 percent stake.
This marks the first non-U.S. deal for Zillow, whose audience of nearly 70 million monthly visitors is largely comprised of home buyers and sellers in the U.S. Zillow cites statistics indicating that Chinese buyers spent more than $11 billion on U.S. properties last year, spending on average $425,000 per home. Sixty nine percent of those deals included all-cash transactions. Leju boasts some 60 million users.
“Brokers and agents with listings on Zillow are now able to reach Chinese home shoppers who are ready to invest in the U.S. market, with no additional cost or effort,” said Zillow Chief Industry Development Officer Errol Samuelson, who joined the company last month and then was promptly sued by his former employer at Move Inc.
The alliance with Leju could be a baby-step toward international expansion, something that Zillow has avoided over the years despite the fact that it was started by veterans of Expedia (which by its very nature in the travel business has a huge international component).
In a talk last May at Seattle University, Zillow CEO Spencer Rascoff noted that there are few cross-border real estate transactions, and cited significant competition overseas.
“We have a lot of opportunity in the U.S.,” said Rascoff. ”I don’t feel we need to rush internationally.”
Terms of the deal — which will include a co-branded Leju-Zillow site translated to Chinese and operated by Zillow — were not disclosed. In the U.S., Zillow powers the home shopping experience on Yahoo Homes, AOL Real Estate and HGTV’s FrontDesk.
Shares of Zillow are up more than 13 percent so far this year, trading at just above $92 per share. It now boasts a market value of $3.6 billion.
