Prem Luthra founded Elm Street Technology this year, and they are off to a fast start. Before founding Elm Street Technology, Luthra was a member of the senior leadership team at Real Estate Digital when the company was sold to Nationstar Mortgage, the parent company of Xome. After serving as Xome’s Chief Marketing Officer for over a year, Luthra decided to leave Xome to pursue his vision of creating Elm Street Technology, which he formed in February with a group of investors.
In July, Randall Kaplan joined Elm Street as its Chairman through the first acquisition, Listingbook. In September, Elm Street also acquired RLS2000 a well-known broker and agent website provider and marketing services firm based in the New England. Elm Street Technology is in the process of rolling up successful technology and service companies that when complete, can deliver everything a broker or agent needs from lead generation to customer for life retention solutions.
Luthra has had a string of wins in the real estate industry, with DNA that connects to the core of the evolution of real estate technology. His career was launched as a member of the team atrealtor.com that I call the Four Horsemen – Prem Luthra, Ben Graboske, Marty Frame, and Errol Samuelson. This team was instrumental in Realtor.com’s success.
Graboske left to join First American, spun out and led CoreLogic before leaving to become an executive with Black Knight Financial. Marty Frame left with Luthra to start up Cyberhomes for Bill Foley of Fidelity National. Frame was part of the team that sold/licensed Cyberhomes to create what is now NAR’sRealtor Property Resource. Samuelson extended his career at realtor.com and then jumped ship to join the executive leadership at Zillow Group, where he has been active in M&A activities. Luthra joined the Real Estate Digital executive team, where they sold the company once, bought the company back, then sold it again.
The investment thesis for Elm Street Technology is pretty simple, but very astute. They intend to roll up best-in-class companies that have been in business for at least 5 years, have an established customer base, and are likely to have a revenue rate of between $1 million and $5 million per year.
The $20 million revenue barrier is magical because it attracts the attention of investment bankers. Lone Wolf recently completed a similar roll up resulting in an investment from the $14 billion fund operated by Vista Equity Partners. If you cannot get to the $20 Million mark, the company is too small for investment bankers like Vista. They are looking for platforms for future growth capital placement.
Elm Street Technology represents a unique opportunity for great, but smaller software firms to be bound together into a holistic solution that will not only provide a delightful product set to customers, but open the door to founder liquidity.
Indeed, both Listingbook and RLS2000 have been operating for more than 15 years. They have experienced staff that is now combining to develop operational synergies. Through the acquisitions, they have retained their entire teams. At the end of the day, the goal is one company and one point of contact for agents, by blending technologies into a single platform to deliver all products and services that a real estate professional needs.
Managing multiple vendors goes off the table, and Elm Street Technology will handle all the services. The name for their new platform may prove to be prophetic for Elm Street’s future as well: it is called Elevate™.