- Daily Zen
Google Capital has invested $50 million in real estate company Auction.com, the largest U.S. online real estate auction firm.
This year Google’s growth-equity firm expects to spend nearly $300 million to support late-stage companies, and this would be the search giants first in a real estate venture. The Google deal values Auction.com at approximately $1.2 billion, the company said Wednesday. A Google Capital representative will also join Auction.com’s seven-member board as a part of the deal.
Auction.com, an online marketplace where users can sell and purchase real estate in an auction setting, has collected a significant amount of capital for its future growth. The company will use the new funding to strengthen its product and marketing efforts.
Auction.com currently based in Southern California was launched in 2008. It handles tens of thousands of transactions in both commercial and residential real estate every year and has a wide array of properties that include luxury houses, office structures, storage facilities, and foreclosed homes. All the buying and selling procedures are made online and financing will be made through a bank. Buyers will have to bid for the property they desire. For every closed deal, the company will get a commission of 5%, the report detailed. The company’s CEO Jeff Frieden said over $7 billion of commercial and residential properties were traded on the site in 2013. Starwood Capital Group, Starwood Property Trust, and Stone Point Capital are also shareholders in Auction.com.
CEO Jeff Frieden said that the partnership is very strategic, which is much more than just the money. He said the Google investment would help Auction.com in expanding and diversifying its technology, which includes providing more services for mobile customers
Google Capital was founded just a year ago but has already made huge investments. The company partnered a group of private-equity investors offering additional capital for SurveyMonkey Inc., the industry leader in online surveys, in a recent $125 million investment round the company also joined Lending Club Corp, a web-based peer-to-peer loan service and most recently Google Capital invested $40 million into Renaissance Learning Inc., an education-software firm.
Since a couple of years Google Inc (NASDAQ:GOOG) has been in a buying spree. In June last year the company purchased Israeli mapping services firm Waze for reportedly around $1.2 billion, and just last month it announced the acquisition of Nest Labs for nearly $3.2 billion.