Residential real estate Internet startup firm Trulia Inc. has filed for an initial public offering (IPO), according to a filing with the Securities and Exchange Commission (SEC) Aug. 17.
Trulia seeks to raise $75 million in the IPO, which is led by JPMorgan Chase & Co. and Deutsche Bank AG. The company is filing its IPO in an improving residential real estate market, albeit the stock market environment for Internet IPOs has been rocky, evidenced by Facebook Inc.’s recent slide following its much-anticipated IPO.
The San Francisco-based Internet firm operates a feature-rich and eye-candy-laden website, as well as mobile applications. According to its Form S-1 filing with the SEC, the company had 22 million monthly unique visitors on average during the last six months ended June 30, 2012.
More than 20 million people visit the website per month to look for homes to buy or rent. Trulia’s revenues are driven by online ads and fees from real estate professionals for more prominent search results.
Trulia’s database has information on around 110 million residential real estate properties nationwide, with 4.5 million properties currently for sale or rent. The company’s graphically rich site has information heat maps with locally relevant information such as education and even crime.
Current owners of the company will sell its shares at the IPO, but a specific number of shares was not mentioned in the SEC filing. Trulia is currently owned by a consortium of private equity firms and private investors including Accel Partners and Sequoia Capital.
In 2011, the company generated revenues of $38.5 million, and for the first half of 2012, revenues were $29 million. Extrapolated to a full year, 2012 revenues will be a 51 percent year-over-year increase.
In a slightly disconcerting trend, despite the increased revenues, Trulia’s net loss for the first six months of 2012 was $7.6 million. In 2011, its full-year loss was $6.2 million.
Since its founding in 2005, Trulia has been supported by venture capital funding totaling almost $33 million, according to the S-1 filing. In addition, it also sold debt worth $15.2 million to finance its operations.
The company said that it expected to continue to incur losses in the near future.
Trulia’s chief rival, Zillow.com, filed its IPO in July, raising almost $70 million. Its shares are up more than 8.6 percent since inception, despite a wobbly IPO market for technology startups as a whole. Zillow, however, is a larger company, generating more than $50 million in revenues in the first six months of the year.
Trulia will likely receive the same scrutiny as other recent Internet IPOs such as Facebook, Zynga, and Zillow. Namely, the question of how the company will generate growth by diversifying its revenue driver will figure prominently into how its underwriters value Trulia’s shares.
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