Investors In The Market For New Real Estate Companies

Even as the blockbuster $3.5 billion tie-up between Trulia and Zillow shows a preference for consolidation among the real estate market’s larger players, venture investment in new  startups working in the industry is soaring, according to our data.

After the real estate bubble popped in 2008 (when housing prices plummeted 14%), the pace of investment into startup real estate companies among venture capital firms actually started to rise.

Things seem to be reaching a peak, the third quarter investments in real estate companies have reached $149  million in 11 deals. That’s roughly equivalent to the entire amount raised ($156 million) by the 65 real estate related startups which received funding in the second quarter of the year.

What’s behind all of this activity? It’s all about the money. With Zillow’s acquisition of Trulia, the company is now worth $5.83 billion, while its offline competitor, Realogy, is worth another $5.47 billion, according to a recent Bloomberg Businessweek story.

The U.S. may be booming, but it’s in international markets where real estate deals are really taking off. Mirroring its moguls’ fascination with international real estate, venture investors are making big bets on real estate technology. Chinese online real estate service Fangdd accounted for most of the capital committed in the third quarter with its $80 million Series B round which closed in June. India’s also managed to score $14 million for its real estate service.

Chinese investors are even getting into the real estate business in the U.S. The social networking site Renren invested in the $31 million round for Fundrise, a crowdfunding platform for commercial real estate development.

Photo via Flickr user

  • Originally published July 31, 2014, updated April 26, 2023