Residential Real Estate Software Accounts for Highest Percentage of Real Estate Software M&A Deals

The residential real estate software M&A landscape continues to impress. The sector accounted for the largest percentage of real estate software transactions in 2017, according to SEG’s 2018 Real Estate Software M&A Snapshot. Having grown from 36% of all real estate software transactions in 2016 to nearly 50% in 2017, the sector clearly exhibits the health and heightened activity of the real estate M&A market.

Residential M&A transactions include software companies providing tools for residential home sales, property search, mortgage origination and financing, and home construction. M&A activity in this sector was driven by a mix of product extension, private equity investments, and non-software buyers entering the space. In 2017, FRONTSTEPS acquired three software companies targeting residential real estate professionals during 2017, including Real Pro Systems, iHomeFinder, and Everapps.  Fidelity National Financial, a non-software buyer, acquired SkySlope and Real Geeks during 2017 in an effort to augment its title insurance and transaction services offerings. Additionally ZPG Group, the U.K. equivalent to Zillow, acquired Calcasa and Expert Agent, providers of cloud-based property data, information and solutions for real estate agents. Placester, a provider of CRM and marketing solutions raised $50M (led by New Enterprise Associates) during 2017.

Looking ahead, 2018 looks to be another high activity year, as the sector already posted notable transactions in Q1.  For example, mortgage servicing giant Nationstar sold off its residential broker/agent CRM and marketing solutions business, Real Estate Digital (RED), to Constellation Software. Nationstar originally purchased RED in 2015 as a way to diversify its revenue streams, and will likely be combined with Constellation’s MarketLeader assets (originally purchased from Trulia).

Download our 2018 Real Estate Software M&A Snaphsot and Vendor Ecosystem for additional key updates, market maps, and M&A insights regarding the residential real estate software sector.