Zillow Continues Expansion with Acquisition of Naked Apartments
Zillow has recently announced the acquisition of Naked Apartments, a real estate rental platform based in New York. The platform was acquired at a price of $13 million and represents the latest step in Zillow’s growth projector toward becoming a rapidly expanding real estate powerhouse.
Over the course of the past five years, the real estate firm has made a number of acquisitions gradually adding to the company’s service roster while making the real estate purchase and rental process simpler and more streamlined. Among those acquisitions is DotLoop, the digital signature and documentation firm, which was purchased for $108 million.
With the purchase of Naked Apartments as well as StreetEasy, Zillow will now be able to further expand into New York City. Zillow purchased StreetEasy for $50 million in 2013 to help fill a gap in the company’s current offerings at the time. Although Zillow has developed a reputation as an industry leader on a national scale, the firm has not, as of yet, developed a strong strategy or product offering for New York City.
How Naked Apartments Will Benefit the Zillow Brand Strategy
The acquisition of Naked Apartments will help Zillow continue to build upon its strategy, including bringing in small companies that have already developed a local following. Given that a large majority of residents in New York rent as opposed to buy, the market is massive. Without a successful rental platform in this major metro area, Zillow has been forced to lose a tremendous amount of business. Naked Apartments will help to rectify this matter for Zillow. By bringing in Naked Apartments, the real estate firm will finally have the opportunity to maximize its success in the New York real estate market, which has historically proven to be quite complex.
Among the largest acquisitions Zillow has closed is that of Trulia, which was acquired in 2014 for $3.5 billion. Up to that point, Trulia had served as a primary competitor of Zillow, providing many of the same service offerings. While it was an expensive acquisition, bringing Trulia under the Zillow roof allowed the company to create a single, dominant firm. Today, the Zillow brand includes not only Zillow and Trulia, but also HotPads.
Nationally, Zillow is able to deploy a wealth of resources that smaller competitors generally are not able to provide, including massive brand recognition. Moving forward, the acquisition of Naked Apartments is one that Zillow may attempt to recreate. Once a local startup is able to make entry into the market, Zillow could easily use its resources to acquire that company, and in the process giving the smaller firm access to support and technology while still retaining local branding. It’s a win-win situation for Zillow, as well as local startups. In the case of Naked Apartments, it’s not likely that the smaller firm would ever have developed into a main competitor for Zillow, but it cannot be denied that both firms will now benefit from the acquisition.