Rocket Companies agreed to acquire Seattle-based Redfin in a $1.75 billion deal that will bring together the nation’s largest mortgage lender with a longtime tech-enabled real estate brokerage.
Rocket Companies CEO Varun Krishna said the two companies share a “unified vision of a better way to buy and sell homes,” adding in a statement that they’ll work to combine efforts in a way that “removes friction, reduces costs and increases value to American homebuyers.”
Redfin CEO Glenn Kelman will continue leading Redfin, and the Seattle-based company will maintain its brand.
“Once the deal closes, Rocket and Redfin will form a technology company with the national scale of a lender, brokerage, title company and home-search site,” Kelman wrote in an email posted to the company’s blog. “Together, we’ll be able to do stuff we could’ve only dreamed about before.”
The acquisition will intensify Rocket’s competition with Zillow, another Seattle-based real estate giant, as well as CoStar, which is spending big to promote Homes.com. Zillow stock was down more than 2% in early trading Monday.
Redfin’s losses have widened and it has struggled to turn a profit amid a tough housing market. The company laid off 450 employees last month after announcing a licensing deal with Zillow.
Just last month, GeekWire speculated whether Zillow could acquire Redfin, though one real estate analyst suggested that Rocket buying Zillow would make more sense given the “name brand” that Zillow would bring to Rocket’s marketing efforts.
Redfin CEO Glenn Kelman. (Redfin Photo)
Shares of Redfin were up more than 70% in pre-market trading Monday. Rocket stock was down 10%.
The deal values Redfin at more than double its market capitalization prior to Monday’s announcement. Total enterprise value of the acquisition, including Redfin’s debt and other financial obligations, is $2.4 billion.
Redfin, which launched in 2004 and went public in 2017 in a deal that valued the company at $1.73 billion, attracts nearly 50 million visitors each month.
Kelman said the acquisition will give Redfin more exposure and new access to data that can boost its AI algorithms. He also noted that Redfin home shoppers will be able to schedule home tours and get pre-qualified for a loan in minutes.
“Together, we can be better than ever at building lifelong relationships with customers who need financial advice before their search ever starts, or who want to explore a home-equity loan years after completing a purchase with Redfin,” he said.
In a post on LinkedIn, Krishna added: “Redfin is known for its beautiful product but is also data powerhouse in an AI-driven world — 100M properties, 50M engaged monthly users, thousands of the amazing real estate agents and 4 petabytes of data.”
Redfin employs more 4,000 people — including more than 2,200 agents across 42 states — and makes most of its money via a brokerage model. It also offers its own mortgage product.
Redfin grew revenue by 7% in 2024 to $1.04 billion, with a net loss of $164.8 million, up from $130 million in 2023. Its stock had fallen more than 30% in the past month.
In 2022, responding to a housing market slowdown, Redfin laid off staff and ditched its iBuying program. It also laid off 4% of its workforce, or 201 employees, in April 2023, and did another layoff in August 2024.
Redfin last year rolled out Redfin Next, a new compensation model for its agents that eliminated salaries and has expanded to more cities.
In addition to mortgage lending products, Detroit-based Rocket Companies also sells auto loans and other fintech offerings.
Rocket, which went public in 2020, reported revenue of $5.1 billion in 2024, and adjusted net income of $456 million. The company’s stock is up nearly 30% in the past 12 months. Its market capitalization is around $31 billion.
Rocket said it expects the combined company to generate more than $200 million in “run-rate synergies” by 2027. The deal is expected to close in the second or third quarter.
Previously: Could Zillow buy Redfin? New rentals partnership brings real estate rivals closer together
