Having closed a fourth round of funding, OJO Labs, a real estate company that deploys artificial intelligence to the home buying experience, announced today the acquisition of home listing website Movoto.
Austin, Texas-based OJO Labs, known for its proprietary personal assistant technology that blends machine learning and human operations, raised $62.5 million in a Series D financing round, led by investment firm Wafra. Other investors include Breyer Capital, LiveOak Venture Partners, Royal Bank of Canada, and Northwestern Mutual Future Ventures.
The latest funding round, the company’s largest by raised capital, comes after five-year old OJO Labs secured $45 million last March.
“We were not planning on raising money,” says John Berkowitz, CEO and co-founder of OJO Labs. “We had a nice balance sheet. But then, the opportunity to do this acquisition and raise money based on an investor interest [came along].”
With nearly 24 million visits last month, according to internal tracking, Movoto, a privately held company, is among the fastest growing top-five home listing websites in the U.S, per web analytics firm SimilarWeb’s ranking of sites for buying and selling residential real estate.
OJO Labs will provide its digital advisor, fueled by a blend of artificial and human intelligence, on Movoto’s listing portal in order to help home shoppers refine their searches and make decisions before approaching a real estate agent. This integration will allow OJO Labs to scale up its chat technology, while preserving its emphasis on customization.
“We had to solve a lot of chicken-and-egg problems as a company to reinvent the way a consumer can search for a home, ask questions on their terms that meet their specific requirements and then connect with the right [agent] who matches their needs over a long period of time,” Berkowitz says. “We've been doing that over the last five years. The problem when you do that is you can't get scale, while also building a really bespoke value-add service for every individual.”
Imtiyaz Haque, CEO of Movoto, said in a press statement, “Our greatest strength is our fully optimized real estate search site. Combine that with OJO Labs’ deeply personalized consumer experience and best real estate network in the industry, and you have a scaled end-to-end solution unlike anything that exists on the market.”
Movoto is OJO Labs’ third acquisition, which further enables it to serve both real estate professionals and home seekers. In October 2018, the company purchased Wolfnet Technologies, a Twin City, Minnesota-based provider of data standardization for multiple listing services, MLS, best known for its responsive property search tool. A year later, OJO Labs acquired RealSavvy, a real estate platform for agents and brokers.
“We essentially have invented a bunch of things,” Berkowitz says. “We have patented our own technology. In places we feel that others can do it better, we have made acquisitions.
Wolfnet was the number one provider of MLS. If we were going to build [the OJO Labs’ digital personal assistant] experience, [we needed] the highest quality listing database. Then, we needed technology to support our real estate agents who are our partners in serving these consumers. So, we bought RealSavvy that provides incredible tools for real estate agents. Then, you bring Movoto, which brings millions of consumers in this experience. Overnight you unlock this really differentiated company that is extremely valuable for consumers.”
OJO Labs’ growth over the years tracks the expanding PropTech PTAC industry, which ushers technological innovations in how commercial and residential real estate is built, bought, sold, managed and occupied. Last year the sector attracted a record $31.5 billion, with venture-capital infusions ballooning by nearly 230% compared to 2018, according to CreTech, a real estate research, events and thought-leadership company.
OJO Labs also has a years-long partnership with Realogy, the largest residential brokerage group in the U.S. with brands including CENTURY 21, Coldwell Bankers and Sotheby’s International Reality. In March, the two companies announced the launch of a new tool (called Conversion Boost) to vet and sustain new client leads for agents. OJO Labs says the solution can improve online conversion rates by “200% above the industry average.”
Such innovations seem increasingly pertinent today, when the coronavirus pandemic has elevated the use of technology in the home purchasing process. OJO Labs reported that its AI-powered home search app, OJO, recorded an increase in the number of openings by 103% between Feb. 3 and March 23.
“We've seen a change in how people think about engaging in their search experience,” Berkowitz says. “People now feel like they can search on their own terms with our product. All of our metrics have exploded in a positive way through Covid because our product by nature adapts to how you want to search.”
With $134 million raised in four years and three acquisitions in half that time, Berkowitz says he is not thinking about taking OJO Labs public and cashing out. Instead, he is doubling down on the values and mission of the business.
“We are not working toward a specific outcome,” he says. “This is a really mission driven company. We want to help make people make better decisions. That is where we started.”