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ZipRealty – Profile

October 19, 2004

HQ: Emmeryville, CA
Founded: 1999
Management: Founded by two grads out of UC Berkeley’s biz school, who recruited Eric Danziger, formerly President of Starwood Hotels and Carlson Hotels.
Investors: Filed for a $69M IPO in March 2004 to be led by UBS and Deutsche Bank, but no pricing update since then. Reported revenues at the time of $39M. VCs are Benchmark Capital, Vanguard Ventures, Barrington Partners, Pyramid Technology Ventures, and Venture Strategy Partners.
Business Model: Virtual residential real estate firm where agents forego offices and claim they can cut commissions by 20-25%.
Competitors: eRealty as well as traditional agencies.
Dirt: ZipRealty’s model would have captured big dollars from VCs at the height of the bubble. Huge market + a Web site = massive IPO & Ferraris all around. This time around Zip seems to be growing sensibly by starting in a few markets and getting word-of-mouth going. Entrenched real estate brokers are increasingly hard-pressed to justify their fat commissions, so we expect Zip to take more and more of their cash off the table.


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