We have seen a lot of M&A transactions in real estate that have sent chills down the spines of customers – Zillow buying anyone, CoStar buying anyone, Compass buying Contactually and Glide, Lone Wolf buying Instanet and ZipLogix. On the other hand, there are acquisitions that cause no fear or doubt, like Moxiworks purchasing Imprev or in this case, Inside Real Estate acquiring Boomtown.
Many WAV Group clients have called to ask us why Inside Real Estate would purchase a company that does many of the same things that kvCORE does. As a point of disclosure, we were not involved in the transaction, but we do have some thoughts.
It is true that the DNA of lead generation, team and agent website, and CRM are central to the elements of kvCORE and Boomtown. Years ago, the two companies dueled it out as the best product for teams. When Kunversion was acquired by Inside Real Estate, they brought their leading agent and team tools to the enterprise brokerage market through the rollout of kvCORE Platform. Today, hundreds of thousands of agents are on kvCORE through brokerage licensing of the platform – EXP, RE/MAX, BHHS/HSoA, Weichert, Royal LePage, NextHome, Keyes, and hundreds more. Inside Real Estate has done an amazing job of building out a brokerage-in-a-box solution for the brokerages that need one, yet allowing for customization and brand autonomy for larger enterprise customers. Regardless of brokerage size, kvCORE offers a wide range of integrations and marketplace solutions giving flexibility to users from the agent level up to the top. The company is positioned with a handful of others as a single platform that does everything that a brokerage needs.
Size matters – Reduction in Costs
The first benefit of the acquisition is revenue. BoomTown, like Inside Real Estate, is a big company. Size matters, and many redundant expenses born by two companies will represent a reduction in operating costs for both – think about data aggregation, data license fees, API management, marketing, accounting, etc. Moreover, they both are excellent at operating paid marketing campaigns.
Diversify the Offering
There are many teams and agents that have access to kvCORE from their brokerage, but choose to pay extra for BoomTown because they like the user experience more or because they want to be differentiated from other agents in their office. On plenty of occasions, a top producing agent or team at a brokerage firm is in competition with another top producing agent or team at the same firm. Having something different makes a positive difference at retaining top agents and teams. It is similar to the way that NASCAR has multiple drivers with different car configurations.
Expand the Offering
There are a lot of things that are available from Inside Real Estate that are not available in BoomTown. Rather than list them all, please visit the Inside Real Estate marketplace. I am sure that BoomTown agents are going to jump on the opportunity to access those tools, driving additional revenue and adoption.
Like Minded Thinkers
One thing that we are able to see from our perspective at WAV Group is the similarity and like-mindedness of these two companies. I am sure that Joe and Grier are finishing each other’s sentences already.
I expect that this acquisition will find two groups of great people coming together and expanding on a shared mission of brokerage profitability in the best possible way.
[screenshots below credit: Houlihan Lokey]