In Austin, there's an ongoing debate about whether the city's tech startups can get the big investments they need to grow quickly and whether there are enough experienced founders to build game-changing companies.
Ben Rubenstein seems to have an answer.
The Yodle co-founder who moved from New York to Austin a few years ago has started a new real estate tech company called Opcity. And, on Wednesday, the startup announced it has raised a $27 million Series A.
The cash will help it expand its existing team of about 100 people at an office space on Cesar Chavez in downtown Austin to a team of roughly 300, Rubenstein told Austin Inno.
At its most basic level, Opcity connects real estate agents with homebuyers and sellers. It uses machine learning to analyze big data and provide prospective homebuyers and sellers with the best agents based on machine learning programs that calculate dozens of factors to reach out to agents most likely to close a deal for the client in their area. So, part of its appeal is providing a high-level of certainty in matching agents with clients.
"It's kind of like 'Moneyball' for real estate," he told me, referencing the book and movie about using data to make a great baseball team.
So, like "Moneyball," Opcity aims to find truths in the data that are often tough for us to see, even for real estate professionals.
“That gut feel is not always as accurate as looking at large amounts of data," Reubenstein said.
There are about 2 million licensed real estate agents, and half of them have closed less than one home sale in the past year, he said.
“There’s this huge world of people you could run into who wouldn’t be that helpful for you," he said.
And, for agents, Opcity says it will provide the one thing almost all agents are looking for -- warm leads at no cost.
There's an entire movie built around the battle for referrals and leads (Glengarry Glen Ross), and real life agents are also often hungry to find those potential homebuyers who are looking for an agent.
Opcity can deliver some of those agents (they have to have pretty good sales records to be prioritized) an opportunity to catch buyers and sellers right when they're interested in taking a next step to see a property and perhaps discuss details. When a client calls Opcity, Opcity gathers information and then hands the caller off to an agent who is best-suited for the job based on the analysis.
For Rubenstein, starting Opcity has been a return to what he loves most after an exciting run at Yodle, the online marketing company that grew to 1,200 employees and $163 million in annual revenue before being sold to Web.com for $342 million last year.
“I knew we were coming close to exiting, so I left just before the acquisition," he said. "I really wanted to get back into a startup.”
Rubenstein started the company last year with Michael Lam, a former VP of corporate strategy and M&A at Citigroup. They raised $1 million in seed funding from friends and family and a round of convertible debt before raising the Series A.
This new round was led by Icon Ventures, a Palo Alto firm where Rubenstein had previously worked with general partner Tom Mawhinney for Yodle's Series C round.
“It’s great to work with people you have an existing relationships with," Rubenstein said. "They trust us. We trust them.”
Toronto-based Georgian Partners also participated in the round. As did Austin's LiveOak Venture Partners.
Rubenstein said it was very important for Opcity to have an Austin-based investor because it plans to grow rapidly and having nearby connections is key.
“You take VC money partially for the money," he said. "But also for their ability to help you grow and scale.”
