Seattle-based Redfin just stumbled on a deal in its backyard that was simply too good to pass up.
The real estate brokerage today is announcing the acquisition of Walk Score, a 10-person Seattle company that ranks millions of addresses across the country based on their walkability, bikeability or proximity to public transportation. It does this on a scale of 1 to 100 by measuring the distance from a specific addresses to certain neighborhood amenities, such as schools, restaurants, libraries and coffee shops.
For example, my Seattle home boasts a Walk Score of 92 — enough to attract the “walker’s paradise” label. However, my childhood home in northeastern Ohio comes in at just 7 — earning it the label of “car-dependent.”
It marks the first acquisition in Redfin’s 10 year history. Terms of the deal are not being disclosed.
“A major part of our strategy is to be the local authority on where people are living,” said Redfin CEO Glenn Kelman. “People come to Redfin to decide where to move, and Walk Score just has so much good information about the neighborhood and about why people would want to live there.”
Kelman said they’ve wanted to acquire Walk Score for a long time, and that the deal finally made sense for both sides. He called the combination a “natural pairing” since Walk Score’s data about U.S. neighborhoods will be combined with Redfin’s deep knowledge of individual homes.
As part of the deal, nearly all of the Walk Score team is joining Redfin. The exception is Walk Score CEO Josh Herst who will serve as an adviser to Redfin through a transition period.
Walk Score was founded in 2007 by former Microsoft employees Mike Mathieu and Matt Lerner, geeky coders and commuters who wanted to help people find the most walkable places to live. The company — which raised $2 million in funding in January 2012 from angel investors Geoff Entress and former Amazon.com CTO Shel Kaphan — still very much holds onto that high-minded mission.
In fact, Kelman said he was drawn to the company’s sense of purpose, something he plans to uphold.
Kelman said that Walk Score will continue to be operated in an open manner, with the data liberally shared with partner companies. In fact, Redfin is boosting the number of “calls per day” from 100 to 5,000 before partner companies have to start paying for the data. The Walk Score brand and Web site also will remain, he said.
“We are going to continue to encourage anybody and everybody to use the Walk Score data,” he said. “The fact that Walk Score has so many partnerships is definitely a benefit…. We don’t plan on doing anything but growing that network.”
Walk Score is now showing 20 million scores per day across some 30,000 Web sites that utilize the data, including Redfin. Over the next few months, Kelman said the Walk Score data will become more prominent on Redfin. “Then, I think you are going to see us explore new ways to guide people to choosing the right neighborhood,” he said.
Walk Score’s Lerner, a bike commuter who holds a computer science degree from Brown University, said that they didn’t really seriously consider any other bids.
“When we realized that Redfin’s mission and our mission can both be described as ‘helping people find a great place to live’ we felt the fit was right and just moved forward together,” Lerner said.
It is pretty amazing that Redfin has not completed an acquisition to date, especially given the consolidation going on in the real estate industry. (Zillow buying Trulia, Realogy buying ZipRealty and News Corp. buying Move Inc.)
Kelman said that Redfin has simply stuck to its knitting over the years, but when Walk Score strolled by the partnership just “made too much sense.”
“The fact that we have all of this inventory of homes for sale, and they have all of this information about the neighborhoods around those homes makes the data integration really powerful,” he said. “And then I think the two businesses can work really well together too because Walk Score is really focused on building out its network and Redfin is really focused on building out its brokerage.”