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Zillow gets $25 million more in venture capital
Seattle Times technology reporter
Zillow.com attracts offers the way a low-priced home lures buyers in Seattle.
The Seattle company, which provides estimates of home values based on publicly available information, is disclosing today that it received $25 million in a second round of venture capital.
To date, the company has raised $57 million, a staggering amount considering it launched its product only five months ago, in February.
Chief Financial Officer Spencer Rascoff said Zillow was not looking for money, but that it decided to take the offer so it can grow faster than planned.
Boston-based PAR Capital Management led the round of funding after it contacted Zillow about making an investment, Rascoff said. Zillow's previous investors, Benchmark Capital and Technology Crossover Ventures, also participated in the round, which took two only weeks to close.
"There was no formal process," Rascoff said. "In fact, I wouldn't call it a process. It came together really quickly."
PAR typically invests in publicly held companies, but Rascoff said the fit was natural and consistent with Zillow's other investors. PAR had previously invested in Expedia, which was founded by Rich Barton, Zillow's chief executive. Zillow's other investors also had a close relationship with Barton before investing.
Rascoff said Zillow received attention because it is doing well at getting customers and advertising. The site receives about 2 million to 3 million visitors a month. In addition, it has about 50 direct relationships with advertisers and thousands more through Google ad links.
With the additional funding, the company plans to add at least 40 employees to its staff of 118. Rascoff would not say what development projects the company was working on.
"We are being a little bit tight-lipped about what's coming next with respect to the product, but we are constantly trying to improve the quality of the underlying data," he said.
Zillow is the second Seattle company in the past two weeks to get funding after investors approached it. Seattle-based Jobster, which assists with online recruiting, raised $18 million, in part, from the venture arm of Reed Elsevier.
Rascoff said investors are interested in the "big disconnect" between the amount of advertising dollars being spent online and the amount of time people spend online compared with other mediums. "There's a lot of wind at your back in the advertising space," he said. "We are well positioned."
Tricia Duryee: 206-464-3283 or email@example.com
Venture investment trend encouraging
Venture-capital investing in the U.S. and Washington state in the second quarter hit levels not seen for several years, according to The MoneyTree survey being released today.
In the U.S., $6.35 billion was invested in privately held companies in the second quarter, up 2.4 percent from the prior quarter. In Washington, $311.6 million was invested, up 15.7 percent from the first quarter. The quarterly results had not been as high in the U.S. since 2002, or in the state since 2001.
The increases are a sign that investors are optimistic, analysts said during a MoneyTree conference call Monday.
The MoneyTree survey is compiled by PricewaterhouseCoopers, Thomson Venture Economics and National Venture Capital Association.
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