eXp Acquires Zoocasa

As part of eXp World Holdings' strategic vision to strengthen its online lead generation, home search and listings portal solutions in Canada, they announced their acquisition of zoocasa.com and its parent company, Zoocasa Realty Inc., effective July 1st, 2022. Zoocasa is an award-winning property technology company and brokerage based in Toronto, Canada, that offers an all-in-one intelligent, scalable platform and listings portal that provides a seamless home search experience, deep market insights and a connection to local real estate expertise.

Zoocasa’s next-generation lead scoring and marketing automation platform enables their inside sales team to screen thousands of leads efficiently at scale by utilizing:

For those unfamiliar with Zoocasa, the company was initially founded in 2008 with significant capital resources from Rogers Communications (TSE:RCI.B)—Canada's largest wireless carrier. It modelled itself after U.S. real estate portals such as Zillow and Trulia (later acquired by Zillow), in an attempt to fill the brand whitespace and compete with the likes of CREA's national portal, realtor.ca. Much like the "Zestimate", which uses Automated Valuation Models (AVMs) to estimate a property's value, Zoocasa came out with a copycat "Zoopraisal" to replicate the feature for a Canadian audience. 

This was all prior to the Competition Bureau winning its case against the Toronto Regional Real Estate Board (TRREB) in 2018, regarding consumer privacy and making sales data more accessible. The Court cited "compelling" evidence that TRREB’s intent was to limit competition, not to protect privacy. Like the Tribunal, the Court analyzed the historical consents that TRREB had secured from previous buyers and sellers. And like the Tribunal, the Court rejected TRREB’s argument that it did not have sufficient consent from clients to share sales data through websites. Zoocasa skirted around the issue by using appraisal data instead of MLS® sold data, provided through a licensing agreement with Centract Settlement Services. Ultimately the product was ineffective and more of a marketing tactic than a dollar figure you can take to the bank. A product that was decried by professional appraisers.

Zoocasa had been losing about $1.5 million a month before it was sold in 2015 to a group of real estate technology investors led by Lauren Haw (current CEO & Broker of Record). Now under the eXp World Holdings banner, it will be interesting to see how Zoocasa scales alongside the fastest-growing real estate brokerage in history, eXp Realty. One of the primary benefits of the acquisition is access to the evergrowing network of eXp agents across Canada, which currently stands at around 5,652. eXp agents will have the choice, much like Redfin's partner agent model, to partner with Zoocasa and service the leads for a referral fee (25% being the industry standard). Eventually, I believe, the vast majority of online leads will be serviced by an eXp Realty agent. It's hard to argue the superior economics of a fully virtual cloud-based brokerage, 80/20 commission splits, stock awards, and revenue share that eXp provides. Combined with a national portal to compete with the major players in the space, eXp continues to cement itself as the most agent-centric brokerage that exists today.