(Real Estate Webmasters)
The Nanaimo, B.C., digital marketing company that landed the richest deal ever on Dragons’ Den—then rejected it in favour of a better offer—has made an acquisition that its founder says gives it “the complete package” to take on its super-sized American rival. Real Estate Webmasters has bought Guaranteed Sale Inc., giving it a series of domain names and a customer base for generating property leads from motivated sellers.
“Basically there’s an agent in every market who offers your home sold, guaranteed, or I’ll buy it,” says CEO Morgan Carey. Those are now effectively REW clients. Every time someone who wants to sell their home enters their address for a free valuation, the Guaranteed Sale platform initiates a lead-generation process for that Realtor.
Webmasters’ impressive growth to date has been built on generating sales leads for real estate agents on the buy side, through marketing and search engine optimization—helping agents connect with first-time buyers or those looking for a first home in a particular city. With the Guaranteed Sale platform, the company can offer Realtors a lead-generation tool on the sell side too. The company also sells transaction management software-as-a-service.
By giving Realtors these web-based tools, they are better able to compete cost-effectively with web-based for-sale-by-owner sites while doing more for the end customer, Carey says. “We’re a race-to-the-top kind of company, not race-to-the-bottom.”
But the Goliath to Webmasters’ David is Zillow, which recently acquired the No. 2 real estate portal in North America, Trulia, for US$2.5 billion. “Agents don’t like these portals because they try to sell their leads back to them and they control the price,” Carey claims. Real Estate Webmasters, by contrast, sells its services on a subscription model, so clients can generate an unlimited number of leads for no extra cost.
Currently Webmasters works with 60,000 Realtors in the U.S., representing about a 6% market share, with strong beachheads in some cities and little presence in others. “We want to take those guys [Zillow and Trulia] out in local markets,” Carey says. “We won’t be able to do so everywhere because they have such a big head start. But maybe in five years, we can.”
The Guaranteed Sale acquisition was financed out of cash flow, Carey says, not out of the new investment by American real estate tycoon and Shark Tank star Barbara Corcoran and silent partners. After attracting an offer of $2 million from Dragons Michael Wekerle and Jim Treliving for a 5% share of the company on the Canadian reality show in 2014, Carey dropped that deal in favour of Corcoran’s offer of the same amount for a 4% stake in January—effectively upping Real Estate Webmasters’ market capitalization to $50 million. The deal has not yet closed, he says.
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