Redfin’s momentum as a newly minted public company continues this morning as its stock rose another 15 percent in early trading Monday.
On Friday, the tech-powered residential real estate brokerage debuted on the Nasdaq and investors immediately liked what they saw. The stock rose 44 percent over its initial offering price of $15 per share, which itself was higher than the expected price range.
Redfin’s stock gains over the past few days have pushed its market cap close to $2 billion. The IPO and resulting stock market success have made for a nice pay day for early investors. It is also another feather in the cap of Madrona Venture Group, the Seattle venture capital company that invested early in each of the last three Seattle area tech IPOs.
Though it was founded in 2003, Redfin still has a lot to accomplish, the company’s CEO Glenn Kelman told GeekWire in an interview on Friday. Redfin has plenty of room to grow, he said, and marketshare to gain in even its top markets.
“The fact that it’s going to take another 10 or 15 years to realize our vision didn’t bother public company investors at all,” Kelman said. “They are used to seeing companies where most of their growth is played out. What we said is we’ve been playing a long game. We’ve worked really hard to make the whole transaction better, not just the initial search, and we still have so much to do.”
One outlet for growth is through new products and services. Redfin disclosed one of those new services, Redfin Now, in an IPO filing, and Kelman provided some more detail in Friday’s interview. Redfin Now lets the online real estate brokerage buy homes directly from customers. While customers get less money for their houses through this program, they get it quicker without having to deal with the stress of finding a buyer.
Kelman characterized the program as an “experiment,” that the company is pursuing because “we just feel like there might be a new way to sell a house.” The program fits right in Redfin’s wheelhouse, and the company’s mission to use transform how people buy and sell homes.
“The kind of customer we are used to meeting is someone who wants the maximum net proceeds,” Kelman said. “But there are some folks who, whether because of an estate sale or a relocation, are willing to pay quite a bit to have the convenience of Redfin acting as the principal, buying the house and letting them move on, and it will be our job to sell it. If that’s 2 or 3 percent of the market we will build a partnership with another company, but if it’s 15 or 20 percent of the market, that’s something we’ll go after. And right now I just feel like we need to understand that customer better. I want to meet those people.”
