On Monday we published an article covering U.S. property listing and research portal CoStar’s acquisition of Realla, a U.K. startup that has amassed over 90,000 listings in their two years in business. At the time I had not been able to get a response from the founders (which was understandable, knowing how much work they must be doing in the wake of the deal). Well, Realla co-founder Andrew Miles was nice enough to take some time to answer some of my snoopiest questions. Here is what he had to say:
FF: How were you approached by CoStar? Did they immediately tell you they were interested in an acquisition?
AM: Realla had historically had a friendly relationship with CoStar’s UK Directors – meeting occasionally, or chatting on the phone to share market views. But we had never had a formal relationship (e.g. partnership). Neither were we direct competitors, competing for the same share of wallet.
In late July 2018, Andy Florance asked Ian (co-founder and CTO) and I if we would like to have lunch with him on a business trip to London. This lasted 3 hours. We discussed in great detail the evolution of the commercial property portal markets in the United States and Australia, and how far behind the UK was. Ian and I were impressed by his vision and how “long-term” and “global” it is. In our view, Andy thinks in 5 to 10-year cycles – even longer – this depth of vision is so rare. He also thinks really, really big!
The acquisition interest followed this lunch, and we had a deal completed less than 3 months later. It was fast.
FF: How will Realla integrate with CoStar/Loopnet? Will it still operate independently or will your listings just be incorporated into CoStar?
AM: Realla will operate independently, and we are going to develop the business and the brand much further.
Three main things have changed. First, we’ve moved to their offices in the Shard (which is fantastic, because our old offices were a dump!). Second, our shareholder structure has changed. We now have a single owner who is totally committed to supporting us to develop the business further for the very long term. And third, we have access to vastly increased resources: e.g. financial fire-power for marketing and hiring new developers and the expertise and reach of the wider CoStar Group.
Its worth noting that CoStar has a strong track record of acquiring and greatly further developing brands and companies e.g. Loopnet and Apartments.com. We hope to do the same with Realla.
And yes, there will be synergies created between Realla and CoStar, as there are with CoStar and Loopnet – for example CoStar customers will be able to feed direct to Realla in real time for marketing purposes.
FF: Will both of you still be working for CoStar for the foreseeable future?
AM: Yes, absolutely. We are committed – as is our team – and very excited for the next phase.
My fiancé and I have a baby due next year, so the increased security of becoming part of CoStar is appreciated, but I do expect the high pace of work to continue!
FF: What do you think the future holds for the property listing landscape in the UK? Will there be competitors to CoStar or will they have the market cornered?
AM: With our excellent team, and supported by the resources of CoStar, we plan to develop by far the best commercial property listing site, first in the UK, then Europe, then potentially beyond. We are committed to becoming the best marketing partner for the industry, and a fantastic utility for our agent and landlord customers. There is a very long term vision underpinning this and deep financial resources.
I want to thank Andy again for his time (and wish him good luck working with a newborn!). He and his team have created something great by first giving something to the property community. In my mind, they deserve all of the success that they have found and I look forward to seeing how they are going to push the industry to new heights.