Similar to other real estate marketplaces,
Auction.com connects buyers and sellers of real estate. And the company has
sold $26 billion of property since inception. What differentiates Auction.com
is that the real estate transaction actually happens online. It’s been
described as an “eBay for real estate.” Financing options remain the same as in
the offline world (it happens via a bank). Similar to eBay, the highest bidder
wins on these auctions.
Another unique factor to Auction.com is that
it lists a broad swath of inventory, from luxury homes, to multi-story office
buildings, to a foreclosed home, or a self-storage facility. Auction.com
actually handles tens of thousands of transactions across commercial and
residential real estate for customers ranging from the largest financial
institutions to individuals and brokers.
Launched in 2008, Auction.com only started
expanding in Silicon Valley last year, with the company’s headquarters in
Southern California. And while Auction.com has raised money from private
equity, it hasn’t used much of its unvested capital and is profitable.
Of course, you can draw comparisons to other
real estate marketplaces like Zillow or Trulia. As Jake Seid, president of
Auction.com, explained in an interview, “Trip Advisor is to Priceline as Zillow
is to Auction.com.” He sees sites like Zillow as compliemtary.
The site says it vets sellers and buyers and
requires proofs of funds and other checks before enabling any transaction, and
Auction.com takes a 5 percent cut of each transaction.
“Auction.com has quietly built one of the
largest marketplaces on the web,” said David Lawee, Partner at Google Capital.
“We think Auction.com can fundamentally change how real estate, and
particularly commercial real estate, can be bought and sold, leveling the
playing field for smaller investors.”
We’re told the new funding will be put
towards product expansion, mobile development,
and sales and marketing.
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