Venture Capital in the Real Estate Industry

Todd Crosland Venture Capital Real EstateThe real estate industry has changed a lot in recent years due to the rise in technology. The most notable change is the increase in online real estate search websites such as Zillow, Trulia, Realtor, etc. These websites have made it easier for buyers to search for homes and easily connect with the seller. What hasn’t changed much in the industry are the procedures for buying and selling a home.

Venture capitalists are seeing this as an opportunity that they can take advantage of. By backing companies that use data analytics to streamline the home buying process, there could be a lot of upside here. In the first three quarters of 2014, venture capital firms injected $118.5 million into eleven real estate startup companies. $64.8 million was put into six real estate startups in the 3rd quarter, which was the largest VC injection into real estate since 2000.

One of the more notable deals was split between the venture capital firms, Crest Capital Ventures, Intel Capital, and Claremont Creek Ventures. These three VC firms helped raise $12 million for SmartZip Analytics Inc., a data analytics provider to real estate companies. The data specifically uses predictive measures to match real estate agents with homeowners that are on the cusp of selling their homes.

Another company, Agent Ace Inc., uses data analytics to match homebuyers and sellers with the best realtor for their specific home buying needs. They recently closed their Series A round with a $6 million investment round.

Buying a home is debatably the most important investments that someone makes in their lifetime. By streamlining the process through data analytics, consumers should be able to feel more comfortable when purchasing a home.