Staff Writer
Columbus CEO

c.2013 New York Times News Service

While the online home information space may be crowded, investors seem to believe that Redfin has a good chance of standing out.

Redfin, an online real estate brokerage, has raised $50 million in a new round of mezzanine capital, led by Tiger Global Management and T. Rowe Price. Five existing investors, including Greylock Partners and DFJ Venture Capital, also participated.

It is the latest bet that Redfin, which combines home listings data with its own army of brokers, can shake up the traditional business of buying and selling property. The company’s approach differs from more prominent competitors like Zillow and Trulia, which focus more on being repositories of real estate information.

Redfin, which is 11 years old, now operates in 22 markets throughout the country, including Boston, New York, Chicago, Miami and its hometown of Seattle.

The chief executive of the company, Glenn Kelman, said in an interview that its approach was closer to that of the car service Uber or the home rental network Airbnb: connecting customers to tangible goods through Internet-based technology. (By his own admission, the business is “very bizarre” in that it is both a software company and a real estate brokerage.)

“It’s the idea that software companies can go into the real world and reinvent it,” he said.

It is an approach that took some time to build up steam. In Redfin’s early days, executives had a hard time persuading would-be investors to take the risk of backing the company, Kelman said.

“The business takes time to scale, which made early-stage investors wary,” Kelman said. “But Tiger and T. Rowe could see great scale here.”

The company has grown significantly since its founding. It is expected to be report positive earnings before interest, taxes, depreciation and amortization, as well as annual revenue growth of more than 50 percent.

Now with the additional financing, Redfin plans to invest more in technology development, potentially even at a pace that outstrips revenue growth.

And with the public markets welcoming technology darlings like Twitter, a public offering could be in the company’s future. During the fundraising process for the most recent round, an investor asked Kelman who would potentially buy Redfin.

According to James Slavet of Greylock, Kelman smiled and said “Nobody.”

“There aren’t natural kinds of buyers,” Slavet added. “I think ultimately Redfin can be a public company.”

But Kelman added that there was no pressure to go public soon, even as stock markets are soaring, pushing up company valuations. Both Tiger and T. Rowe have indicated that they are not looking for an offering anytime soon, instead asking what Redfin plans to do to improve its customer service.

“I don’t feel the pressure,” he said. “I’m not going to sell my shares in the company when the lockup ends. It makes me less focused on the timing.”