Redfin is going public.
I have known Redfin for many years. It is the real estate tech company trying to disrupt the real estate market.
Nice to see that it has survived many years and it is now going public. I remember admiring Redfin many years ago.
So let’s dig in the latest S-1/A.
*Great that Goldman Sachs is the lead underwriter-
*Good business model in a fragmented market-
*Nice growth in revenue, a 40%+ increase in 2016.
*It is so confident that it releases estimated June 2017 revenue and net income. Wow! This is real confidence!
*Emerging growth company-
* No debt.
*Great investors including Tiger Global and Greylock. I would put money on these two investors.
*legal issues, some are settled but there may be more.
*Still negative net income and negative cash flows
*Dot.com era metrics: monthly average visitors, real estate transactions..
*Still need to grow a lot. High concentration in cities.
*Super long risk section…..wow…
Assessment, given the size of the real estate market and Redfin’s potential growth, I think it is a reasonable investment. In terms of valuation, well, it may be high but it does have good growth potential. However, in terms of the financials, hmmm…this is not my typical investment but I have not participated in IPOs before so let’s see how it goes 😀