[qi:053] Earlier this week we were joking about Fundinistas or companies that the ones who raise venture capital relentlessly. One of them happened to be Zillow, which had raised $57 million. Well, today they called to let us know that they had raised another $30 million, bringing the total to $87 million. And with that they have become the Naomi Campbell of Fundinistas.
Legg Mason Capital Management led the round, and previous investors like Benchmark Capital and TCV also participated in this round. Zillow’s rivals include Trulia and RealEstateABC.com.
We asked CEO Rich Barton if the fresh capital was a hedge against the slump in the housing market and at the same time keep ahead of the competition. “I am not particularly worried about the downturn in the real estate market,” he said. “With the buyers market, we are seeing a lot more time being spent on the site.”
In other words, the downturn might actually be turning to their advantage, though I don’t see how the downturn doesn’t impact them. The real estate related advertising is already slumping, as we had pointed out. With $87 million in venture capital, Zillow has to exit at a whopper-valuation or eventually go public.
Nevertheless, Zillow’s funding is a sign that technology VC dollars continue to flow freely, despite the economic turbulence that has been rocking the markets at large. Barton did say that the new round of capital was a soft hedge against the vagaries of capital markets, where money supply dries up as mysteriously as Boston Red Sox’s late season slump. The company is going to spend more money on sales people and engineers. “We plan to add and expand our community features,” he added. The company has 155 employees.