Seattle-based real estate information service, Zillow.com raised $25 million, nine months after it raised $26 million. Think about it this way – Zillow has raised $3 million (or about $57 million) for every month of its 19-month existence.
The new cash comes from Boston-based Par Capital Management and others such as Benchmark Capital and Technology Crossover Ventures. The company wants to be the biggest real estate site in the world – we shall see! How long before you figure some of its rivals will get similar, if not bigger, trucks stopping outside their offices and dumping some cash?
Zillow.com is the latest start-up to become part of a late 1990s trend that is making a comeback: the big money VC round. Last week, Seattle-based Jobster raised $18 million from Reed Elsevier Ventures and other existing ventures. Earlier in the month, MobiTV raised a whopping $70 million from the likes of Oak Investment Partners. As we had reported earlier, Limelight Networks is in the process of closing a monster round, which would make some of these investments look like chump change.
In the second quarter of 2006, venture capitalists invested $6.3 billion – the highest dollar amount into the most deals since the first quarter of 2002, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.
“It appears as if the venture capital industry is slowly ratcheting up investment levels for the first time in four years, and these increases seem to be directed in a prudent manner,” Mark Heesen, president of the National Venture Capital Association said in a press release. That might have been true, but the recent trend of big money investments shows that prudence might be giving away to old-fashioned avarice.
You can almost expect this trend to continue, and perhaps accelerate in coming months. Silicon Beat reports that Silicon Valley-based VCs are raising new money from their limited partners – some have already raised billions – and that would have to be deployed soon.
Before they can go out and raise cash for new funds, many of the firms have to invest the remnant money from their circa 2000-2001 funds. Otherwise, Limited Partners might be asking them the difficult question: Why should I give you more cash when you are sitting on a pile already? A good example would be Oak Investment Partners, which raised $2.56 billion to become the largest venture capital fund ever. It also invested $70 million in MobiTV. Coincidence?
Expect more big-ticket fundings!
Incredible… When I first heard about Zillow, I visited the site a few times and spread the word like wildfire. They clearly have a “wow factor”, and will definitely be useful.
My worry is that VC’s are betting too much money on them. I’m sure they can pull a profit, but probably not to the magnitude the VC’s expect.
it is becoming increasingly clear that money is cheap again and venture capitalists are in spend more. zillow would have to work hard to become a leader in this space, and one should expect losses to continue for a bit but the pay off looks big.
One gets the impression that there’s enough idle money out there that can create inflationary pressures at any time – and the only reason it does not is due to the slow bleed of money into the investment world.
http://www.thefinalanswertoeverything.com/
This is an awesome game, it is really addictive so you have been warned. Money really is cheap, one US dollar is only worth about 4 cents.
Looks like we need to get that daily VC newsletter going again. The one from the late ’90’s that made me feel like a piker for only raising $2 million. 😉
just tried to enter zillow.com, there is what I got:
“Sorry, but we do not support the Opera browser
Instead, please use Internet Explorer or Firefox”.
interesting what investors who using O will say:)