Rocket Companies to Acquire Redfin for $1.75 Billion, Aiming to Revolutionize Home Buying with AI

Detroit's Rocket Companies to buy Redfin

Why it matters: Combining Redfin's listings with Rocket's mortgage products could make the homebuying process more seamless, the two companies say. Between the lines: The deal is among Rocket Companies' largest acquisitions since it went public in 2020, the Free Press reports. State of play: As a result of the all-stock transaction, shareholders of Rocket Companies would own about 95% of the new company and Redfin shareholders about 5%. The intrigue: The influx of Redfin's data is expected to strengthen Rocket's AI models for personalizing and automating customers' experiences. What they're saying: "Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs and increases value to American homebuyers," Rocket Companies CEO Varun Krishna said in a statement. What's next: The deal is pending the approval of Redfin shareholders and is expected to close in the next six months.

Seattle-baed Redfin being bought by Rocket

Rocket Cos. is pushing deeper into the property market with a deal to buy Redfin Corp. that values the real estate listing site at $1.75 billion. The Detroit-based financial technology group will pay $12.50 for every Redfin share in an all-stock transaction, according to a statement Monday that confirmed an earlier Bloomberg News report. The price represents a premium of 63% over the volume-weighted average price of Redfin's common stock for the 30 days through Friday. Shares in Redfin closed at $5.82 on Friday, giving the Seattle-based company a market value of about $736 million. Rocket has a market capitalization of about $31.5 billion. Redfin stock surged more than 80% in premarket trading on Monday, while Rocket shares fell around 10%. Redfin Chief Executive Officer Glenn Kelman is anticipated to continue to lead the business, reporting to Rocket's CEO Varun Krishna. Redfin operates a home search platform with more than one million for-sale and rental listings and an tech-powered brokerage of more than 2,200 agents. "Models from Redfin can augment models from Rocket and help us understand how and when a consumer is in a good place where their intent and their seriousness to buy a home increases," Krishna said in an interview. Krishna said more homes are selling for at or below their listing prices and that inventory is staying on the market for longer. "You've seen a little bit of relief with mortgage rates as well," Krishna said. "So we look at these as good indicators." Rocket's stable includes mortgage, real estate and personal finance businesses. The company expects to achieve more than $200 million in run-rate synergies by 2027 through the purchase of Redfin, according to the statement. The company has said it's betting on technology, specifically artificial intelligence, to fuel a rebound after a drop-off in mortgage origination. "This is really about accelerating our purchase and our AI strategy," Krishna said of the Redfin deal. "It allows us to integrate home search with the Rocket platform, which obviously covers things like financing, title, servicing, closing." Morgan Stanley is advising Rocket on the deal, and Goldman Sachs Group Inc. is working with Redfin. The transaction is expected to close in the second or third quarter of this year.

Rocket Is Acquiring Redfin for $1.75 Billion So Customers Can Buy and Sell Homes From Their Phones

Rocket Companies, a financial technology business and mortgage lender, is buying real estate brokerage Redfin in an all-stock deal for $1.75 billion, the companies announced in a joint statement on Monday. "Rocket and Redfin have a unified vision of a better way to buy and sell homes," said Varun Krishna, CEO of Rocket, in the statement. "Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs, and increases value to American homebuyers." Bloomberg first reported the news just before the companies announced the deal. Redfin was founded in 2004. Now, the "tech-powered brokerage" has more than 2,200 agents, a data repository of 100 million properties, and one million active purchase and rental listings, according to the report. The company will work to implement AI technology into the home-buying process. "Varun and I see how much better real estate could be when AI guides customers not just through that first step in their search, but all the way home, through the sale, the loan, and then a lifetime of accumulating equity and wealth," said Glenn Kelman, CEO of Redfin, in the statement. Competitior Zillow is also working on becoming a one-stop shop for real estate. Zillow CEO Jeremy Wacksman told Entrepreneur in February that the company is taking steps to become a transaction-based business where people buy, finance, rent, and sell homes. "Everything else in our lives we can do from our phone, but once you start to click the make an offer button, everything goes offline in real estate, so we're trying to bring that online," Wacksman said in the interview. Kelman, meanwhile, said in the statement that Redfin and Rocket have similar plans. "We want a customer to be able to check her phone to find out what she can afford, see which homes are just right for her, schedule a tour with a local, expert Redfin agent, and get pre-qualified for a loan, all in a matter of minutes," Kelman said. Kelman will stay on to run the business and report to Krishna, the statement noted. The transaction has been approved by the Boards of Directors of both companies and is expected to close in the second or third quarter of 2025, according to the statement.