Durham machine learning startup acquired by real estate giant
A Durham-based machine learning and analytics company has been bought by one of the largest residential real estate companies in the world.
RE/MAX said this week it has acquired the startup First for an undisclosed amount — a move that will mean its services will only be available to RE/MAX agents going forward.
Denver-based RE/MAX operates real estate brokerage franchises in more than 100 countries, and the deal means that First’s services will be expanding globally, first in Canada and then elsewhere.
First, a 4-year-old company that operates out of the American Underground startup hub in downtown Durham, uses artificial and predictive intelligence to determine when and why people will buy or sell a house. The goal is to help agents get the most out of their existing contact list rather than improving cold leads, with First’s app delving into an agent’s contact list to highlight potential deals.
Determining who might be in the mood to buy or sell potentially helps real estate agents connect with clients at just the right time, rather than trying to start a relationship too soon or too late. Through its app, the company tells agents which clients it should prioritize when it comes to contacting them.
The company say its tracks more than 700 different signals across the country to make its predictions.
Before the acquisition, the company had raised $7.4 million from investors, according to Crunchbase. Mike Schneider, First CEO and co-founder, will stay on with the company following the merger and the 20-person team will remain in Durham.
In a blog post, Schneider said RE/MAX was one of several companies that approached First about an acquisition in the past year.
“Early this year, we looked for ways to build on our core offering and explored integrating with brokerages and brands that shared our mission,” he wrote. “... Several approached us about acquiring First outright, and while we initially dismissed this option, we eventually decided to explore it further.”
Schneider said he ultimately picked RE/MAX’s offer because of its outlook on how to integrate new technology into its business model.
“It ... became apparent that RE/MAX is playing the long game when it comes to diversification and investment in technology,” he wrote. “For example, RE/MAX shares First’s commitment to leading the industry in data privacy and security, despite the additional costs.”
Beginning early next year, First’s services will be exclusively used by RE/MAX agents. Current clients not affiliated with RE/MAX will have their contracts honored through the end of 2020.
The investment from RE/MAX comes as the company overhauls its digital efforts, as brokerages increasingly fight for customers online.
In 2018, the company bought a Colorado-based web design company to improve its website and mobile platforms.
“We have set our sights on becoming the global leader in real estate technology, and the acquisition of First is evidence of that steadfast commitment,” RE/MAX CEO Adam Contos said in a statement.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
