WASHINGTON: CoStar Group Inc. has reached an agreement to acquire Homesnap Inc. for $250 million in cash, a news release said.
Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship.
Over 300,000 agents nationwide use the application an average of 30 times each month. Those 300,000 agents are also the nation’s most productive, selling the majority of homes in the US. The platform enjoys high growth and engagement as the number of active monthly users has grown at a compounded annual growth rate of over 40% since 2016, while marketing product sales have risen over 75% per year over that same period.
Supported by a consortium of hundreds of the country’s largest multiple listing services (MLSs), over 1.1 million real estate agents have access to Homesnap Pro. These agents represent over 90% of the residential real estate agents and listings in the United States.
With the support of this impressive consortium, Homesnap’s public residential real estate portal showcases 1.3 million active property listings. Tens of millions of home shoppers use the Homesnap website and app to look for a home.
“The acquisition of Homesnap will enable us to enter a new space and expand the total addressable markets in which we can compete,” said CoStar Group founder and CEO, Andy Florance.
“The estimated value of commercial real estate assets in the U.S. is $16 trillion. With the new addition of clients and information covering 90% of the estimated $27 trillion dollar U.S. residential real estate market we are almost tripling the size of our addressable markets.
“Over the past thirty years, CoStar has become the leading real estate technology platform by working in partnership with commercial real estate brokers to serve their needs for data, analytics and advertising exposure for their property listings.
“Similarly, Homesnap works in very close partnership with residential agents to serve their needs for data, analytics and advertising exposure for their property listings. We will continue to differentiate our residential real estate portal and solutions by working solely to help agents market their listings and their brands, which is in sharp contrast to other portals that increasingly advertise on top of agent listings and offer brokerage services directly.”
The addition of Homesnap’s complementary offerings will quadruple the number of professional, paying brokers and active agent users on the CoStar Group U.S. platforms from approximately 100,000 today to over 400,000. The number of U.S. property listings available across CoStar’s brands will double from approximately 1.35 million today to over 2.6 million.
“Homesnap has great relationships, data, software, and tools for residential real estate professionals that are complementary to our existing offerings,” continued Florance.
“The tools and functionality developed by Homesnap for residential property agents, such as lead generation, client collaboration, and digital advertising, have direct applicability to commercial brokers. Our goal is to make these enhanced capabilities available to all of our audiences. Combining forces with Homesnap is also expected to enable us to expand and deepen our collaboration with MLSs nationwide.
“A very large percentage of CoStar’s clients such as investors, banks, government agencies, appraisers, suppliers, and brokerage firms are active in both commercial and residential real estate, so we believe that they would welcome a more comprehensive solution for their needs across all real estate segments.”
“Homesnap has spent years building tools that reinforce the agent-client relationship and arm both home buyers and agents with the data and software they need to find homes and do their jobs,” said John Mazur, CEO of Homesnap.
“In addition, residential property agents spend an estimated $10 billion every year on software and marketing, while influencing a further $21 billion of spending in adjacent markets, such as lending, insurance and relocation services. We are excited to join CoStar Group and leverage their 30 years of knowledge and experience in property data, software and marketing to take advantage of this significant growth opportunity.”
Homesnap is also headquartered in the Washington, D.C. area, employs approximately 150 people and is projected to achieve approximately $40 million of revenue for the full year 2020, representing revenue growth of approximately 45% compared to the full year 2019. The transaction is expected to close in 2020, subject to customary closing conditions and regulatory review.
CoStar Group Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information.
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