SEATTLE, March 30, 2020 — Redfin Corporation (NASDAQ: RDFN), a technology-powered real estate brokerage, has announced a significant capital infusion of $110 million from Durable Capital Partners LP, a long-term investment firm. This strategic investment from durable capital partners is comprised of $70 million in common stock and $40 million in convertible preferred stock, signaling strong confidence in Redfin’s vision and future growth trajectory within a rapidly evolving real estate market.
The agreement with durable capital partners involves the issuance of common stock at a price of $15.61 per share, alongside convertible preferred stock carrying an annual dividend of 5.5 percent. The preferred stock provides durable capital partners with the option to convert at a price of $19.51 per share. Furthermore, to incentivize long-term growth and performance, automatic conversion is stipulated after three years if Redfin’s common stock sustains a closing price above $27.32 for 30 consecutive trading days. A redemption clause is also in place for the preferred stock on November 30, 2024, at durable capital partners‘ discretion, payable in cash or common stock, should conversion not occur beforehand. The finalization of this private placement remains subject to standard closing conditions, as detailed in Redfin’s Form 8-K filing with the Securities and Exchange Commission.
This investment marks a deepened relationship between Redfin and durable capital partners. Henry Ellenbogen, representing durable capital partners, has a history of strategic investments in Redfin, dating back to 2013 when Redfin was a private entity navigating the recovery phase post-financial crisis. Glenn Kelman, CEO of Redfin, highlighted the significance of this partnership, stating, “Durable’s Henry Ellenbogen has been leading investments in Redfin since 2013… In chaotic times, he understands our long-term commitments to our culture and our technology, and why those commitments position us to take share in a housing market that is being transformed by this pandemic to be more virtual, convenient and efficient. We’re proud to be his partner.” This endorsement underscores the strategic alignment and mutual confidence between Redfin and durable capital partners.
Redfin’s position as a technology-driven real estate brokerage is central to its value proposition. By integrating full-service agents with cutting-edge technology, Redfin aims to modernize the real estate experience, making it more consumer-centric. Known for operating the #1 brokerage website and offering tools like the Redfin Estimate, renowned for its accuracy in home valuation, Redfin empowers both homebuyers and sellers. Their technology-powered approach translates to significant commission savings for clients across over 90 major metro areas in the U.S. and Canada, with a track record of facilitating transactions exceeding $115 billion in home value. The investment from durable capital partners is poised to further accelerate Redfin’s technological advancements and market expansion.
Forward-Looking Statements
It is important to note that this announcement contains forward-looking statements regarding the anticipated closing of the proposed sale of capital stock. While Redfin believes these statements are based on reasonable expectations, actual outcomes may differ materially. Potential factors impacting these statements include unforeseen delays in obtaining regulatory approvals. Investors are encouraged to review the “Risk Factors” detailed in Redfin’s Annual Report for the year ended December 31, 2019, available on Redfin’s Investor Relations website and the SEC website, for a comprehensive understanding of potential risks and uncertainties. These forward-looking statements are reflective of beliefs and assumptions as of the date of this press release, and Redfin undertakes no obligation to update them in light of new information or future events.
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SOURCE Redfin
