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US brokerage Redfin announce plans to raise up to $239 million for technology and acquisitions

Online-centric brokerage Redfin has announced a plan to raise up to US$239 million (AU$322 million) through a combined stock and debt offering. The funding will take place in In two separate offerings; initially through selling 4.025 million shares of stock at a price of $23.69, totaling $95,332,125, before selling $143.75 million in “convertible senior notes,” which can later be converted into company shares.

While the company hasn’t yet announced what the funding is specifically for, a statement from Redfin said they “may choose to use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies or other assets”.

The brokerage went public last year, in a much-hyped IPO, and raised $138.5 million in the process. Since then the company has been focused on hiring and advertising, which led to a $36.4 million loss in the first quarter of 2018.

In the next round of reporting it’s expected that the company will show a revenue of between $142.1 million and $142.5 million, showing a net income of $3.2 million.

The announcement from Redfin follows a similar announcement in June from rival Zillow. Zillow announced they were seeking to raise $650 million for “acquisitions of, or investments in, other businesses, products or technologies.”

Unlike Zillow, to date Redfin has been fairly quiet in the acquisition space. Since 2014 they have only acquired Walk Score, a private company that provides walkability services and apartment search tools. It’s expected if this round of funding is successful there will be some big acquisitions on the horizon for the company.

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