Categorized | Commercial

Zillow IPO Might Test Waters for Smaller Tech Companies

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The real Estate company Zillow plans to go public shortly and its IPO may serve as a test for smaller tech companies. The company is an online real estate site and its IPO is causing quite a stir in the market. The Seattle company is trying to raise as much as $71 million by selling about 3.4 million shares. Share will start at about $18. Two former Microsoft executives, Richard Barton and Lloyd Frink, founded the company. Zillow has already received $87 million in capital from various banks including Benchmark Capital. The company is now valued at about $485 million but some may think that company is overvalued. Zillow is still losing money but they have made an effort to decrease its expenses as its revenues increase significantly. The real estate site is gaining popularity as traffic has increased and the site is recognized as the number 3 site in the United States.

The Zillow IPO has been filed at times when other tech companies have filed for their IPOs as well. Groupon and Linkedin have both filed their IPOs earlier in the year where Linkedin has already begun selling shares. 2011 marks the year of the tech IPOs as other tech companies are thought to follow suit. Groupon and Linkedin are larger companies compared to Zillow. So the real estate IPO will show how much interest investors have in smaller companies. Most of the smaller companies that have filed for IPOs have seen their shares decline. Some of the other tech companies expected to file includes Zynga and LivingSocial, where both are planning to raise a large amount of money.

Zillow has posted net losses for the firs quarter of 2011 to be $826,000, which is down compared to losses of $2.8 million during Q1 of 2010. The company has also seen a decrease in net loss in 2010 compared to 2009. The real estate company says it 22 million different users coming to the site. The company generates its revenue from subscription fees and from advertising. Revenue has increased in 2010 compared to 2009.

 

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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