As more companies merge, who is dominating the tech landscape?
Inside Real Estate’s purchase of BoomTown is part of a trend of consolidation across the industry, leading to a handful of major players in tech.
- Inside Real Estate, Lone Wolf Technologies, Elm Street Technology, MoxiWorks and Constellation1 are proving to be 5 of the leading players in tech.
- Hundreds of smaller companies are competing for a piece of the tech pie, which pushes more established firms to continue innovating.
- With so many companies in the tech space, consolidation can create complementary product offerings.
Buyers and sellers may be sitting on the sidelines, but deals are flowing in the world of real estate technology.
Last week's announcement of Inside Real Estate buying BoomTown is the latest in a string of tech acquisitions. The purchase represents an opportunity for Inside Real Estate to tap into a bigger, and appealing, line of revenue, said Travis Saxton, who leads T3 Sixty's technology consulting division.
But it's not the only major player. While the real estate technology industry remains vast, consolidation has led to a few big front runners, said Saxton. Along with Inside Real Estate, other companies leading the way in tech include Lone Wolf Technologies, Elm Street Technology, MoxiWorks and Constellation1.
"We do also see a mix of established and up-and-comers pushing them so it's not like they can sit idle," said Saxton, adding that his group at T3 Sixty is tracking more than 1,200 companies in the industry. (Note: Real Estate News and T3 Sixty share a founder, Stefan Swanepoel.)
Among the companies on Saxton's radar are Back At You, Brivity, Chime, Cloze, Delta Media Group, Rechat and Ylopo — all of which are innovating at a rapid speed, Saxton said. With so many of these companies out there, Saxton expects to see consolidation continue.
Adding value with complementary products
Nick Gaede, senior marketing manager with Lone Wolf, said many companies in the real estate software space are striving for an end-to-end platform. He said the acquisitions that have brought together complementary, rather than adjacent or duplicative components, have made the biggest impact.
"We can't speak for everyone, but what we're trying to do at Lone Wolf is bring together all the various disconnected pieces, people, and processes in real estate and provide agents and brokers with a fully connected experience in a fully connected platform," Gaede said.
Two years ago, Lone Wolf acquired several companies, including HomeSpotter, LionDesk, Cloud Agent Suite, Propertybase and Terradatum. Since the acquisitions, Gaede said the company has been working to create an integrated experience for its customers.
"To be frank, integration is a long and complicated process — it involves critical technical underpinnings that affect security, performance, scalability, etc. — and thankfully, we're near the end of it," Gaede said in an email.
Lone Wolf plans to have several releases that will bring about a more unified platform and expand partnerships with brokerages and industry leaders, Gaede said.
"It will be an exciting year for Lone Wolf products as we move closer and closer to a connected experience and unified platform, and we wish other software providers all the best as they attempt to do the same," he said.
After an acquisition, execution is key
While acquisitions make the headlines, they're just the first step, said Andrew Binkley, president of Constellation1.
"I'd argue that the acquisition itself isn't what has the impact. It is what follows the acquisition," Binkley said. "If the teams execute well on the integration and organic growth plans that follow acquisition, that is where you can see a long-term impact.
"We are still in the relatively early days of the consolidation, so I think big impacts remain to be seen," Binkley added.
Binkley noted that technology consolidation is happening across many industries, but the process has been a little slower in real estate tech due to the challenge of adoption.
"In real estate software, consolidation has been slower, relatively speaking," Binkley said. "One reason is people consistently underestimate the difficulty of achieving high levels of adoption in real estate technology. In most industries, workers are employees, and adoption is easier to achieve. Real estate agents are often independent contractors, and they are going to adopt the technology that they most like and trust."
Constellation1 sees significant growth opportunities this year, including the April 1 launch of Nestfully announced on Jan. 24. The company is providing technical services for the new consumer search portal which will include listings from three of the largest multiple listing services: California Regional MLS, Bright MLS and REColorado.
"Our message that we are a stable, long-term partner that will put our customers first is going to resonate this year more than ever," Binkley said. "This customer-first focus is one reason that Nestfully chose us to be their technology partner. Nestfully is all about MLSs putting consumers, brokers, and agents first. They wanted a technology partner that was going to support that."
Write to Dave Gallagher.