CoStar to Acquire Homesnap in $250M Deal
Real Estate In-Depth | November 23, 2020
WASHINGTON—CoStar Group Inc. reported on Sunday that it had reached an agreement to acquire Homesnap, Inc. for $250 million in cash.
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. More than 300,000 agents nationwide use the application an average of 30 times each month.
The platform enjoys high growth and engagement as the number of active monthly users has grown at a compounded annual growth rate of more than 40% since 2016, while marketing product sales have risen more than 75% per year over that same period.
Supported by a consortium of the country’s largest multiple listing services (MLSs), more than 1.1 million real estate agents have access to Homesnap Pro. These agents represent more than 90% of the residential real estate agents and listings in the United States. 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 U.S. residential real estate market we are almost tripling the size of our addressable markets.”
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 more than 400,000. The number of U.S. property listings available across CoStar’s brands will double from approximately 1.35 million today to more than 2.6 million.
“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 and CoStar are both headquartered in the Washington, D.C. area. Homesnap 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.
On Nov. 18, Homesnap announced it had ranked No. 115 on Deloitte’s 26th annual Technology Fast 500, a ranking of the 500 fastest-growing companies in North America. Homesnap was selected based on its three-year growth rate of 1037% which occurred from 2016 -2019.
In September, The Board of Managers of the National Broker Portal, a joint venture between Broker Public Portal (BPP) and Homesnap, announced that Joseph Rand of Better Homes and Gardens Real Estate| Rand Realty of Nanuet—now Howard Hanna | Rand Realty—had been named executive director of the Broker Public Portal with Homesnap.
Rand will remain the Chief Creative Officer for Howard Hanna | Rand Realty, which operates nearly 30 offices with 1,200 agents. As executive director for BPP, Rand serves as the face of a movement that has grown to include more than 240 multiple listing services (MLSs) representing more than 90% of all property listings nationwide. OneKey MLS is a participant in the BPP with Homesnap platform. BPP with Homesnap drives millions of agent/client interactions inside the Homesnap app and offers free leads to agents.