According to an amended and restated certificate of incorporation filed with the State of Delaware on Nov. 6th, Redfin recently authorized for sale 20.5 million shares of series F preferred stock at an issue price of $2.4286.
That equates to roughly $50 million.
The documents do not indicate the investors behind the new round, and they do not show whether any insiders or executives took money off the table in the deal. The authorization to sell the shares follows a $14.8 million round from Globespan Capital Partners, Madrona Venture Group, Vulcan Capital, Draper Fisher Jurvetson and Greylock Partners from Oct. 2011. That funding round appears to be marked as the series E financing round in the corporate documents in which 12 million shares were priced at $1.2394.
Asked to comment on the financing, Redfin asked to place GeekWire under a news embargo for 6 a.m. Thursday. We declined, given that the filings are public record. CEO Glenn Kelman declined to comment when reached by GeekWire after this post was published, but the company has since issued a press release confirming the news. (See below).
FOLLOW-UP: Q&A: Glenn Kelman says Redfin will use $50M injection to get pulse of Wall Street and remain ‘unpredictable’
Redfin has been discussed as a potential IPO candidate, and CEO Glenn Kelman has said in the past that 2014 might be the year it makes the leap.
“I’ve always aspired for Redfin to be a public, independent company,” Kelman told us in 2011. “Our hope is that we can become a public company in the next few years, but I try to be careful about a specific date first because there are all sorts of ways it could take longer depending on how the business performs, and second because we are still making very speculative investments that Wall Street isn’t set up to understand. If that takes more or less time, I won’t be disappointed.”
The latest funding could provide a bit more runway for Redfin to experiment, including with new products like the new Builder Services offering that it rolled out on Wednesday. As we reported last weekend, Redfin also is looking to expand in Minneapolis. It currently operates in 22 markets in the U.S., including Seattle, Portland and San Francisco.
Here’s a look at the documents. We’ll be tracking the story closely, and update as more details come to light.
UPDATE: Redfin issued a press release Wednesday evening confirming the $50 million round, and noting that Tiger Global, T. Rowe Price and existing investors participated in the deal. Fortune’s Dan Primack pegs the valuation of Redfin, which unlike Trulia and Zillow represents buyers and sellers in real estate transactions, at $500 million. By comparison, Zillow is now worth $2.9 billion and Trulia is worth $1.29 billion.
SEATTLE, Nov. 13, 2013 /PRNewswire/ — Redfin (www.redfin.com), the technology-powered real estate brokerage, today announced a mezzanine investment of $50 million led by Tiger Global Management LLC and by portfolios managed by T. Rowe Price Associates, Inc. Previous Redfin investors Greylock Partners, Globespan Capital Partners, DFJ Venture Capital, Vulcan Capital and The Hillman Company are also participating. Redfin will use the capital on new technology to make every step of home-buying and selling better for consumers, from the open house to the tour to the offer, negotiation and escrow process.
“Redfin’s devotion to the customer was apparent from our first meeting with the company,” said Lee Fixel, Tiger Global partner. “The real estate industry is ready for an innovator who understands how business can be transformed by putting the customer first, as we’ve seen with many industries before. We are confident this strategy will create significant value for all stakeholders over the long term.”
“Redfin is reinventing the process of buying or selling a home,” said Henry Ellenbogen, portfolio manager for T. Rowe Price’s New Horizons Fund. “We invest in companies that have the opportunity to grow. We believe Redfin has the real-world service, management team and vision to be much larger.”
“T. Rowe Price and Tiger Global see opportunities over ten-year time-frames, building positions in companies as they grow from private businesses into industry leaders,” said Redfin CEO Glenn Kelman. “We are delighted to have found partners who support our mission to make real estate better for consumers, not just ourselves, because this is the only way we know of to build a business for the ages.”
Austin Ligon, co-founder and former CEO of CarMax and Redfin board director, also took part in this financing. Prior to this financing, Redfin had raised $45.7 million in venture capital.
Redfin Growth Milestones
Redfin serves 22 major U.S. markets, with an award-winning website and mobile tools, as well as teams of experienced Redfin real estate agents who are paid to put their customers first. Major milestones include:
- Annual revenue growth of more than 50%.
- Increase of more than 100% in home-selling transactions.
- More than $175 million in customer savings on real estate fees.
- More than $13 billion in home sales.
- Expansion to five major markets in 2013, including Houston, Charlotte, and Miami.
- New ground-breaking technology like Redfin Price Whisperer, Redfin Matchmaker, Home Value Tool and Redfin School Search.
- Industry-leading customer satisfaction, with 97% of Redfin clients willing to recommend Redfin to a friend.
Redfin is a leader in an emerging category of software companies that also offer real-world goods and services. The company’s combination of technology and service benefits consumers on three fronts:
- Technology: Redfin invented map-based real estate search, then built technology to make every step of buying or selling a home better, from on-the-spot tour-scheduling to an online deal room to a targeted digital campaign for each listing.
- Advocacy: Redfin’s on-demand service model takes the pressure out of working with its agents, who earn a bonus based not on the sale, but on the customer’s satisfaction with the sale. Redfin agents fight to get customers a good deal but also tell customers when to walk away from a bad one too.
- Value: because technology frees Redfin agents to spend their time serving — not searching for — clients, the company can deliver 97 percent customer satisfaction and an average savings of $10,000 in fees for a customer who buys and sells with Redfin. The company refunds up to half of the buyer’s agent fee, and saves a typical listing client 1.5 percent of the home value.
Redfin (www.redfin.com) is a technology-powered real estate broker that represents people buying and selling homes. Founded and run by technologists, Redfin has a team of experienced, full-service real estate agents who are advocates, not sales-people, earning customer-satisfaction bonuses, not commissions. Redfin’s online tools feature all the broker-listed homes for sale, as well as for-sale-by-owner properties that don’t pay brokers a commission. The company serves 22 U.S. markets and has closed more than $13 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World’s Most Valuable Private Tech Companies by Business Insider.