As a VC if there is a chance to invest in, i would put my money in the business which not only i can understand but is simplistic enough that everyone can understand. In that context i lean towards companies in Real estate business which are solving consumer issues and bringing more efficiencies in the process of Real estate business. Redfin is a company which has huge potential to grow. The company solves a big problem in the real estate business.
Redfin combines real estate search with real estate agents. It has one of the best integration with maps and provides search capabilities which lets you filter on several parameters. It also refunds buyers 50 % of the commission paid to the buyer’s agent. One of the main issues in real estate business is the traditional broker has a conflict of interest with the buyer as they have more incentive to sell the property faster and at a higher price to earn higher commission. Redfin solves that problem by incentivizing field agents based on the feedback from customers and keeps only few agents in central office to complete the real estate transaction.
The market of the company is huge. It attracts “do it yourself” buyers who can do some homework on their own and bring agents into picture when they have selected few of the properties. Redfin still has a lot of room to grow in US and outside.
Redfin is led by a very efficient and seasoned team of entrepreneurs who also founded Plumtree . Glenn Kelman is the CEO and founder of the firm and Sasha Aickin serves as CTO. The company has the backing of the Paul Allen the co-founder of Microsoft.