Placester Gets $50M from NEA to Expand Real Estate Software Tools
Investors are doubling down on Placester. On Friday, the fast-growing real estate software company announced a $50 million equity funding round from previous investor New Enterprise Associates (NEA).
The Series D round brings Boston-based Placester’s total venture capital haul to $100 million. That makes the company one of the biggest venture-backed technology bets in New England, and one of the best-funded alums of the Techstars Boston startup accelerator program. (Other previous Placester investors include Romulus Capital.)
The deal also marks the second big investment by NEA in a Boston software company in as many days—the venture firm also led a $54 million investment in DataRobot announced Thursday.
Placester CEO and co-founder Matt Barba says the company will use the new money primarily to invest in product development, as it attempts to become the go-to software provider for real estate agents.
“The real estate industry is huge,” Barba (pictured above) says. “We’ve got this vision to build a platform, an all-in-one platform that agents and [real estate firms] can build their businesses on. We wanted to lean in.”
Barba, a former real estate agent, started the company in 2009 with Fred Townes, the former chief technology officer of Mashable. The company went through the Techstars Boston accelerator in 2011.
Placester declined to share specific financial figures, but Barba says its annual revenue has increased by more than 300 percent in each of the past three years. Its products are now used by over 400,000 real estate agents in the U.S. and Canada. Placester is not profitable, Barba says.
The company sells several products to real estate professionals, including software that handles website building, marketing automation, data analytics, open house management, and customer satisfaction surveys. Placester also offers two mobile apps, Barba says.
Placester’s products are “very skewed toward taking your first step online, getting some leads and traffic, nurturing those relationships, and using that to go out and meet new customers,” Barba says. “There’s a whole bunch of other opportunities, in terms of making those products feature-rich and continuing to improve them, but also adding new products.”
Two areas of focus will be investing more in mobile tools and adding products that handle back-office functions for real estate agents, Barba says. That might include tools for managing transaction documents, helping with accounting, and enabling more digital collaboration between agents and their clients, he says.
“I think we’ve hit on something with the simplicity of how to use our products, and this integrated nature,” Barba says. “That value proposition seems to resonate a lot. I don’t think it’s rocket science,” but the real estate industry is still in the process of adopting digital tools that are already commonplace in many other industries, he adds.
As Placester expands its set of products, one of the challenges will be making sure the additions are useful for customers and help them grow their businesses, Barba says. “You’ve got to be really thoughtful about how all these things work together, and not just check the box on do you have the feature or not.”
Placester currently employs 170 people at offices in Boston and Chicago, up from 16 employees when the company closed its seed funding round four years ago. It added the 15-person Chicago office through the acquisition of HomeFinder last year. Placester also acquired RealSatisfied last year, a five-person Australia-based company that ran customer satisfaction surveys for the real estate industry.
Placester plans to hire about 30 more people this year, Barba says. “It’s not a hiring spree,” he says. “We’ve got some really tactical roles in product and engineering we’d like to fill.”
Any time a startup raises this much capital, it’s worth asking about exit plans. Barba says Placester hasn’t decided yet which path it might take to try and generate a return for investors.
“Our goal is to build a strong, independent software company,” Barba says. If Placester does that, it will have options for delivering a strong return, he adds.