Since I wrote most of the last post about Redfin’s IPO off-the-cuff without thinking too hard, I promised I would have something more substantive on Redfin’s IPO and the possible impact. Well, as it happens, I’m writing up a fairly significant white paper on the future of brokerage and this goes right to the heart of it.
So first of all, if you’d like to get a copy of the brokerage white paper once I’m done, drop me an email and I’ll add you to the list.
Having said that… the Redfin IPO is one of two things.
It could be one of those moments we’ll look back on in 4-5 years and realize “that’s the moment everything changed” much like how we view Zillow going public back in 2011. Don’t forget, all you Zillow Haters, that few people paid much attention to Zillow back in 2010-2011.
Or, it could be a total fizzle like Ziprealty, which went public in 2004 and did precious little of anything until it was acquired by Realogy (where it still hasn’t done anything), and the industry will be emboldened in the status quo.
I am very much in the first camp, because Redfin is a contemporary of Ziprealty, and competed head-on with Ziprealty when ZIPR was a public company flush with cash. Redfin was gaining online when the competition was even fiercer with Trulia as an independent company.
So let’s assume that Redfin will successfully complete its IPO, raise $100 million, and be valued in the neighborhood of $3 billion. Let’s further assume that Redfin behaves like intelligent business people, as they always have, instead of buying private jets for Glenn Kelman or some such thing. (Which they won’t, since their S-1 stressed “frugality” as a virtue of and culture in Redfin.)
What are the likely consequences?
In this part, I focus on a couple of thoughts in the brokerage side of things.
For the TL;DR crowd, Redfin kills off any non-boutique large brokerage… unless they swallow their pride and go beg Zillow for help.