Startups like Zillow and Trulia have reshaped the real estate market by giving consumers with their 24-hour covetable, clickable window into shoppable home sales — and the other players in the real estate marketplace are struggling to catch up.
This deluge of leads coming in to real estate agencies across the country from online sources is the inspiration for Agentology, a new startup which just raised $12 million in a round led by Defy.vc.
The investment was sourced through mutual work that Jenny Lefcourt, the investor at Freestyle Capital who led Agentology’s seed round, was doing at All Raise with Defy co-founder Trae Vassallo, who will join Lefcourt on the company’s board of directors.
For Vassallo, the deal is doubly rewarding because it came through All Raise. “Within the context of All Raise,” this is the first time I’ve been able to invest with a female GP,” Vassallo says.
Beyond its significant backing, and the speed with which Agentology managed to add additional capital, is an idea whose time has come, according to co-founders David and Avi Tal — the two brothers behind one of San Diego’s fastest growing startups.
The two men were both acutely aware of the challenges facing upstart or boutique real estate firms that could not keep up with the flood of leads that came in from mobile applications and the internet.
Basically, Agentology adds a rapid response service powered by automatically generated messages and a team of sales reps that can vet leads, and combines that with a referral network among real estate agents to hand off leads they don’t have the time — or inclination — to take.
As we wrote:
… conversations work towards qualifying the lead, and the full conversation around any lead is handed over to agents with full transparency, where those agents can check on all back-logged communication.
But even with a service that qualifies leads and keeps them warm right from the get-go, agents still can’t take on every single qualified lead that comes their way, either because they’re too busy or because that lead doesn’t fit into their wheelhouse.
That’s where Agentology really differentiates from other lead-gen services like Riley.
With Agentology, brokers are able to refer their leads to another broker with the click of a button. Agentology has more than 30,000 agents in their referral network.
Agents who refer leads get a 25 percent of the receiving agent’s commission once they close on that particular listing, which is essentially turning an interface button into a revenue model.
Of course, Agentology takes their own cut of the commission (10 percent), as well. The company also makes money on its core service, charging based on lead volume on a monthly basis, which turns out to be around $4 to $6 per lead.
“Technology needs to be leveraged to automate things that can and should be automated,” says chief executive David Tal. “Part of the reason the industry is broken is that the industry went from one extreme to another… You had to do all of these things face to face now you can do all of these things at their fingertips so people don’t have any loyalty to any provider or any service individual.”
“We like investing in what I’m still calling authentic founders… founders that have lived and breathed and struggled with the problem,” Vassallo says of the Agentology investment.
“If you look at the agents themselves and the sets of tools that they have… they’ve been dragged online,” says Vassallo. “They have not had any help managing this business and they have no ability to deal with leads effectively.” Agentology, she says, solves that problem.
