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[qi:053] Earlier this week we were joking about Fundinistas or companies that the ones who raise venture capital relentlessly. One of them happened to be Zillow, which had raised $57 million. Well, today they called to let us know that they had raised another $30 million, […]

[qi:053] Earlier this week we were joking about Fundinistas or companies that the ones who raise venture capital relentlessly. One of them happened to be Zillow, which had raised $57 million. Well, today they called to let us know that they had raised another $30 million, bringing the total to $87 million. And with that they have become the Naomi Campbell of Fundinistas.

Legg Mason Capital Management led the round, and previous investors like Benchmark Capital and TCV also participated in this round. Zillow’s rivals include Trulia and RealEstateABC.com.

We asked CEO Rich Barton if the fresh capital was a hedge against the slump in the housing market and at the same time keep ahead of the competition. “I am not particularly worried about the downturn in the real estate market,” he said. “With the buyers market, we are seeing a lot more time being spent on the site.”

In other words, the downturn might actually be turning to their advantage, though I don’t see how the downturn doesn’t impact them. The real estate related advertising is already slumping, as we had pointed out. With $87 million in venture capital, Zillow has to exit at a whopper-valuation or eventually go public.

Nevertheless, Zillow’s funding is a sign that technology VC dollars continue to flow freely, despite the economic turbulence that has been rocking the markets at large. Barton did say that the new round of capital was a soft hedge against the vagaries of capital markets, where money supply dries up as mysteriously as Boston Red Sox’s late season slump. The company is going to spend more money on sales people and engineers. “We plan to add and expand our community features,” he added. The company has 155 employees.

  1. Zillow is telling prospective employees they build profitable solutions, and yet they aren’t profitable

    I’ve commented positively on the site Zillow before, with my only serious criticism being their zestimates can be way off. A fact which has led to legal challenges for the company in the past.

    Yes, I realize these are just glorified computer es…

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  2. It’s ironic that as the U.S. real estate market flounders, Zillow thrives. It kind of counter-intuitive but maybe it makes sense to have a resource that gives you detailed information at a time when you better make the right decision buying or selling.

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  3. 155 employees, $87m in funding – Om, what are there current revenues?

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  4. Why do you think nthat Zillow is thriving? I’ve heard the exact opposite.

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  5. Unless they’ve got a secret plan for distressed property, I see this ending VERY badly.

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  6. @ Peter:

    / start of sarcasm.

    Who cares what their revenue is? 155 employees x $70,000 (salary each) = They can operate for 9 years without worrying about that.

    / end of sarcasm.

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  7. I was surprised to read about them getting more money.

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  8. I do some business in the Real Estate industry here in Miami Beach, and Zillow is one of those companies I would pay to get their services.. so I believe it is going into the right direction!

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  9. [...] Zillow.com has secured a fresh round of money, the venture capital kind: $87 million to date in VC … [...]

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  10. Hi, it’s David from Zillow -

    The number one question here seems to be; “how can Zillow grow advertising revenue while the real estate market is down?” Consider that more than 80% of home buyers start their search online, yet less than 15% of real estate advertising revenue is currently spent on the web. A downturn in the housing market actually increases the focus on ROI from advertising and should therefore accelerate the trend to advertise online – where the buyers are. Further, Zillow’s audience represents a wealthy demographic that appeals to a broad range of advertisers who aren’t impacted by the changes in the housing market..

    buckpost – that’s a theory shared by Bill Tanner from Hitwise. He said he measured increased interest in online valuations when the market started to turn.

    Mr. Chips – Thank You!

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