Property engine developer Homesnap agreed to a $250m cash acquisition by Real estate data provider CoStar Group. This is a notable exit in the space in which corporates have been actively investing over the past five years but there have not been many exits.
Homesnap counts newspaper publisher AH Belo among its previous backers. CoStar expects to extend its property coverage through the acquisition, particularly in the residential segment, increasing its total listings from nearly 1.4 million to more than 2.6 million.
Launched in 2008 as Sawbuck Realty, Homesnap has developed an online real estate platform with a database that includes listings for properties from more than 250 multiple listing services. It claims to have more than 1.1 million real estate agents signed up to the professional edition of its platform, representing more than 90% of residential agents in the US.
The real estate tech space has received a lot of attention from corporate venturers in the second part of the last decade. Both the number of such corporate-backed deals and the total estimated capital in them increased substantially – from $433m over just 18 deals recorded in 2015 up to $5.43bn spread over 52 deals by the end of last year.
The investment pace appears to have been slowed by the downturn in 2020. However, there is hope for the sector, at least in the US. According to the latest data on building permits by the US Census Bureau, new permits and building starts essentially recovered to pre-pandemic levels in October. It is possible that the all-time-low interest rates, which are expected to be maintained, will spark a new real estate boom, particularly after a vaccine is widely distributed.
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