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Zillow Rival Snags $6M
Reply.com eyes acquisitions, looks beyond homes and cars.
By Ken Schachter
Wednesday, April 4, 2007

Reply.com, a rival of Zillow.com that provides online tools for consumers on the verge of buying a house or car, has closed on $6 million in new funding from a venture capital syndicate and a former Apple Computer executive, the company announced Wednesday.  

The latest round brings total funding of the San Ramon, California, company to $23 million. Participating in the round were Scale Venture Partners, Outlook Ventures and Debi Coleman, a member of Reply.com's board of directors and a former chief financial officer of Apple Computer.  

Six-year-old Reply.com, known as Next Phase Media until it was rebranded in June 2004, plans to use the funding to expand beyond houses and cars either through acquisitions or organic growth.  

"We'd like to expand into other categories like insurance and home improvement," said founder and Chief Executive Payam Zamani.  

Outlook Ventures Managing Director Randy Haykin and Reply.com co-founder John Truchard have joined Reply.com's board of directors. Mr. Haykin is a veteran of consumer Internet ventures including Yahoo, Overture, eCircle, eTeamz/Active Network, and Digital Chocolate.  

Sharon Wienbar, managing director of Scale Venture Partners, said the investment in Reply.com fits in with the firm's vision for backing Vantage Media, which creates search-marketing campaigns.  

"That space is a very large addressable market," she said. "The average transaction is high."  

Reply.com charges a $44.95 monthly subscription fee plus $44.95 per lead to real estate agents who must buy a minimum of five leads per month. The company offers 12 months of free leads if at least one lead does not enter escrow within 12 months.  

Reply.com uncovers those leads by offering free tools for home and car buyers and sellers. For instance, a home seller can get an instant valuation report, a satellite photo of the property, and a list of comparable homes in the neighborhood.  

While nearly two-third of traffic comes through affiliate marketing and advertising, "organic" traffic through avenues like search engine optimization and the return of previous visitors has grown from 5-10 percent 12 months ago to 35 percent, Mr. Zamani said.  

Unlike Seattle-based Zillow.com, which relies on advertising support, Reply.com derives most of its revenue by selling contact information from users. Seventy-nine percent of Reply.com's revenue comes by selling customer leads, 20 percent through fees associated with its 12,000 neighborhood web sites around the country supported by real estate agents and other sponsors, and 1 percent through advertising, Mr. Zamani said.  

Mr. Wienbar said that real estate agents and car dealers are eager to find well-qualified leads and Reply.com serves as an intermediary.  

"It makes sense for someone to sit in the middle," she said.  

Other companies in Scale Venture Partners' portfolio include ScanSafe, Seattle Genetics, and Glu Mobile, which went public in March.

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