Seattle-based Zillow Inc. has entered into a definitive agreement to buy San Francisco-based HotPads, a map-based rental and real estate search site, for $16 million in cash. This is Zillow's first acquisition of a primarily consumer-facing company and its sixth acquisition in less than two years.
According to Zillow, nearly 2.8 million unique users visited HotPads in October, primarily to shop for rentals. Nearly 70% of all HotPads listings viewed last month were homes or apartments for rent.
‘This acquisition represents a significant step-change for Zillow Rentals, allowing us to dramatically increase the number of leads we send to landlords,’ says Spencer Rascoff, CEO of Zillow. ‘HotPads has a younger, complementary and rental-focused audience. Now Zillow will become even more relevant to consumers at the beginning of their real estate life cycle. In addition, by acquiring an amazing engineering team with a deep understanding of how people search for rentals and become tenants, we expect to accelerate our innovation and monetization of our rental marketplace.’
The acquisition is the latest move by Zillow to grow its rental offering operations for consumers and real estate professionals. Last month, the company launched a free marketplace and suite of tools for rental professionals, which includes listing distribution across the Zillow Rental Network. Zillow expects HotPads to join the Zillow Rental Network after the acquisition is completed.