Realogy, parent company of Sotheby’s International Realty, announced that it intends to by ZipRealty for $166 million in cash.
I see this as a great move – as does Brian Boero at 1000 Watt, an astute industry observer.
The purpose of the deal is to make Zip’s tech available to franchises like ours. Zip’s tech platform – mobile/desktop website, CRM, lead generation – is its biggest strength. By making this big investment, Realogy is signaling that it’s serious about providing its franchises with technology that’s ahead of the curve. It’s also an acqui-hire that gives Realogy an innovation factory in the Bay Area, as the Zip team will continue to develop the platform in its Emeryville offices.
Zip has developed a proven, successful tech platform in the past 10 years, and has has been selling its tech to independent brokerages on a white-label basis. Realogy plans to make that tech exclusively available to its local brokerages – as fast as humanly possible, I hope!
It seems that Zip’s been losing money on its brokerage operations, so this is a win-win for both. Zip gets a lifeline, and Realogy acquires cutting edge tech for its franchise brokerages and agents (plus picks up the Zip offices, which will be folded into Realogy’s company-owned stores).
