Seattle-based real estate tech company Zillow Group Inc. (Nasdaq: ZG) discussed it decision to shutter Zillow Closing Services during the company's second quarter earnings call on Wednesday.
Zillow announced the move in June to shut down its title and escrow service, despite the company's push to become a housing super app. On its Wednesday call with investors, Zillow's chief financial officer, Jeremy Hofmann, said Zillow Closing Services was not "the tech-forward and integrated product we believe customers and partners need."
Zillow co-founder and CEO Rich Barton added on the call that the company's decision to sunset Zillow Closing Services was "not because we don't think title and escrow is important as part of the transaction but because we built that thing for Zillow Offers," its defunct home-flipping business.
Zillow Closing Services was aimed at sellers, buyers, lenders and agents. The website is still live. Zillow is working through existing transactions in the pipeline before officially closing the service. The company eliminated about 80 roles will be eliminated due to the decision.
The company decided to shut down Zillow Offers in 2021. Shutting down Zillow Offers took several quarters and resulted in a 25% reduction in headcount. In October 2022, Zillow laid off an additional roughly 300 employees. The company had 5,991 employees at the end of June, according to a filing with the Securities and Exchange Commission.
Zillow generated $506 million in revenue during the second quarter of this year. It generated $504 million during the same period last year. Zillow's residential and mortgages revenues were both down year over year, but the company generated $91 million in rentals revenue during the quarter, a 28% year-over-year increase. Zillow posted a net loss for the quarter of $35 million.
Zillow launched in 2006. In addition to its home and rentals search tool, the company provides mortgages and a platform for partner agents called Premier Agent.
The company acquired Milwaukee-based VRX Media in December. The real estate marketing company provides agents with professional real estate photos, virtual tours, drone photos and drone videos. The acquisition was meant to strengthen ShowingTime+, which allows agents to schedule and manage listings.
This week, the company also acquired Boston-based startup Aryeo, a platform that serves real estate photographers, with plans to bring the startup within its ShowingTime+ software suite.
