Trulia's IPO Tests Appetite For Tech Start-Ups
STEVE INSKEEP, HOST:
The real estate website Trulia is successfully riding the housing recovery, and has just gone public. After one day of trading, the San Francisco-based company is valued at well over half-a-billion dollars.
From our member station KQED, Aarti Shahani reports this is seen as a boost for the tech sector after Facebook's shaky plunge into the stock market.
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AARTI SHAHANI, BYLINE: San Francisco realtor Shaban Shakoori and I hop out of his silver BMW. We're house-hunting with the Trulia.com mobile app on our phones.
SHABAN SHAKOORI: This is 1958 Sacramento Street.
SHAHANI: I see. So, we're standing in front of this property, not for sale sign, but we know it's for sale because it's showing up on our smartphones.
SHAKOORI: That's right. It's showing up on our smartphones, and it's showing us all of the square footage, price per foot, and how many views there have been, which is a really unique metric, because normally, you don't see that unless it's your own listing. You might want to factor that in when making an offer.
SHAHANI: Now, you are, in fact, part of the business model, Shaban. You pay the company for your name and number to pop up on people's Androids and iPhones when they're house-hunting.
SHAKOORI: I pay a few hundred dollars a month for that.
SHAHANI: How many people do you get calling you?
SHAKOORI: I usually get a few calls a week.
SHAHANI: Shakoori and Trulia are both treading new waters. The online real estate company put up a for sale sign on its own stock yesterday, opening at the New York Stock Exchange at $22 a share - well above the asking price.
By law, Trulia employees can't grant interviews right now. Sam Hamadeh, CEO of the research firm PrivCo, says Trulia's initial public offering is the first real test of the market's appetite for technology start-ups since Facebook's rocky debut.
SAM HAMADEH: Right now, in Silicon Valley, everyone from venture capital firms to private companies with IPOs in the pipeline to bankers are breathing a collective sigh of relief, you can almost hear, audibly.
SHAHANI: Trulia makes money by selling advertisements and subscriptions to realtors. While Trulia has not yet turned a profit, Hamadeh estimates its revenue nearly doubled in the last year, climbing to $77 million.
HAMADEH: If they're losing realtors, then no question that the value of the company will be hurt, the revenue will be hurt, and they will be hurt. So they must make sure that they have enough on the demand side from house-hunters to keep those realtors actually closing deals.
SHAHANI: Trulia is part of a cottage industry that's moving real estate listings from newspapers to websites and smartphones. Competitors include Redfin, Realtor-dot-com and Zillow.
Spencer Rascoff, the CEO of Zillow, says these companies don't depend on the housing market, so much as help it.
SPENCER RASCOFF: It's about giving consumers access to information that previously was locked up in county courthouses or secret databases. Information is power, and to the extent that home shoppers have information at their fingertips, I believe that's good for the economy and that's good for the real estate market.
SHAHANI: The realtor Shaban Shakoori agrees that these websites and mobile apps are modernizing his business.
SHAKOORI: You know, it's a good way for me to meet clients, and it's a good way for clients to reach me, because there are so many of us out there.
SHAHANI: It's like a dating service.
SHAKOORI: Yes. It's a little less romantic.
SHAHANI: As for the stock, Shakoori says he'll buy a Trulia share after he closes his first Trulia deal.
For NPR News, I'm Aarti Shahani, in San Francisco. Transcript provided by NPR, Copyright National Public Radio.