NAR launches tech incubator
ORLANDO, Fla. -- Having acquired some experience helping companies like DocuSign to grow by providing venture funding, the National Association of Realtors is now ready to take on a more hands-on role as a tech incubator.
NAR's new "tech accelerator" program, REach, will help up to 10 companies develop useful tech tools for Realtors and others.
The program -- which is aimed at both start-ups and established companies looking to learn the ropes of the real estate industry -- was announced as NAR kicked off its annual convention in Orlando.
REach is being developed through the association's strategic venture arm, Second Century Ventures. Constance Freedman, who helped launch the Second Century fund in 2008 and manages it as NAR's vice president of strategic investments, has been named REach's managing director.
"What we're looking to do is expand on the Second Century Ventures' investment thesis, which is take great companies that can help both the members, the Realtors, improve their business, and also companies that can provide good returns overall," Freedman said. "What we're opening up the incubator for is to look at those companies at an earlier stage than we would normally invest in out of the Second Century Ventures fund."
Companies selected for the REach program will get a crash course in how the real estate business works, along with ongoing mentoring from top industry executives who "understand what problems need to be solved," said REach Senior Associate Shalin Sheth.
Freedman said the education component will help companies that are new to real estate "understand what it means to come into this industry, identify their customers, why they buy, and who they should target."
REach advisors include some high profile industry leaders, including Move Inc. Chief Revenue Officer Errol Samuelson, Houston Association of Realtors CEO Bob Hale, GoodLife Team founder and CEO Krisstina Wise, Century 21 Real Estate LLC CEO Rick Davidson, and Better Homes and Gardens Real Estate CEO Sherry Chris.
Among the more than 40 mentors participating in REach are Postlets founder Asher Matsuda, DocuSign Chief Marketing Officer Dustin Grosse, Zeek Interactive President Jeff Turner, Long and Foster broker of record J. Nicholas D'Ambrosia, and NAR's Director of Social Business Practice, Heather Elias.
About 500 Realtors who are early technology adopters will serve as a "test kitchen," providing feedback on the ideas and technology tools that emerge. As thought leaders in the real estate industry, the beta testers will also be an asset in promoting the tech tools developed by REach participants, Sheth said.
Freedman said REach is looking for agents "that are on the cutting edge, that want to know about new technologies that are coming out and be the first to try them out."
After being the first to test out the products, their feedback will be used to refine them to better meet their needs, she said. More information about becoming a REach beta tester is available at narREach.com.
The deadline for companies to apply for the program is January 10. The six to 10 companies that it's anticipated will participate in the nine-month program will be selected in February for a March kickoff.
The companies will be introduced at NAR's midyear meeting in May, and showcase what they've accomplished at next year's annual convention in November.
"We're really looking for companies that have the highest potential, so if we don't identify six, we won't do six," Freedman said. "We won't do any more than 10 though, because we want to make sure we can have ... the ability to be very hands-on and really help these companies."
Second Century Ventures has already established itself as an investor in real estate-related companies, taking stakes in eProperty Data, DocuSign, and ifbyphone.
This year DocuSign brought its total funding to date to $122 million with $60 million in Series D investments. Ifbyphone landed Series C funding, and eProperty Data was acquired by Xceligent.
NAR was also an early investor in Realtor.com operator Move Inc. More recently, NAR has sunk close to $58 million into a property database built by a subsidiary NAR formed in 2008, Realtors Property Resource.
While RPR has signed up multiple listing services (MLSs) and commercial information exchanges (CIEs) that serve about 65 percent of NAR's 1 million members, the project -- originally projected to be in the black by this year -- is costing NAR more than $18 million a year to sustain.
Although Second Century Venture was not involved in NAR's investment in Move or RPR, RPR CEO Dale Ross and President Marty Frame are REach advisors, and RPR Senior Vice President of Operations Jeff Young is a REach mentor.
"The ultimate goal (of REach) is to help try to graduate this class into a Second Century Ventures investment, or possibly an affiliate partner of NAR, whatever what might make sense," Freedman said. "So we're very motivated to help these companies get to a point where it would actually qualify for the stage of funding that Second Century Ventures typically invests in. Certainly if this is successful, we'll continue doing this program."
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