Sramana Mitra: Given the numbers you’ve quoted in terms of houses sold, it seems to me that you should be ready to go public at this point. Is that part of the thinking? Why or why not? What’s going on from an exit point of view?
Jake Seid: Our goal is to build a big company. We just raised money from Google, pretty recently, relatively speaking. We think there’s a lot of opportunity to continue to build value in the business without being a public company right now. The things that this management team is excited about is that we’re a market leader. It’s a massive market and there’s deep barriers to entry. We can be a public company. We have the core ingredients. We were just talking about it before this call. There’s a variety of reasons why private companies aren’t rushing to go public today.
Sramana Mitra: It’s a pain to be a public company.
Jeff Frieden: It’s sad, by the way. Jake articulated that very well. One of the things that I can’t toss out is our GMV was around $7 billion last year. It’s a pretty exciting number for us to hit.
Sramana Mitra: Do you disclose the valuation at which you raised the Google Capital round?
Jeff Frieden: Yes.
Sramana Mitra: What was the valuation of that round?
Jake Seid: $1.2 billion.
Sramana Mitra: Do you have revenues that support that valuation? This is not some cookie weird valuation, right?
Jake Seid: We have revenues and profits. The company has been profitable since inception. That’s the other material difference between our business and other businesses.
Sramana Mitra: How refreshing!
Jeff Frieden: I always say we should always make money.
Sramana Mitra: Exactly. Why would you bother building a business if you’re not making money, right?
Jeff Frieden: If there’s an opportunity to do acquisitions, we’re out looking for them.
Sramana Mitra: Is there anything else that you want to add?
Jeff Frieden: No, it’s an honor to meet you.
Jake Seid: I would just like to throw out two more things that I think are really interesting that we’re seeing. One is we’ve gone mobile recently. People are buying homes and buildings on their mobile devices. Multi-million dollar buildings. It’s a shocker to us that people go on their mobile devices and add up a building to their shopping cart and check out. The other thing that we didn’t get into is we’ve sold buildings as high as $75 million on the Internet.
Jeff Frieden: We have a $100-million building coming up in June.
Jake Seid: This is 100% online. It’s pretty amazing to see people buying something like that online.
Sramana Mitra: You have functionality on the site to bring together a consortium of investors to buy at that level? This is probably not one investor.
Jeff Frieden: We do have a financing portal called Auction Finance. Somebody buying a $100-million building would need $30 million down and they could finance the other 70% through one of our financing partners. We’ve created an ecosystem around real estate. No, we do not have the ability for multiple people to buy together, but we do have Blackstone buying many buildings on Auction.com. We have the exclusive listing. If you want to buy any of our properties, you have to come to us. We deal with a person buying a home to live in, all the way up to the Blackstones.
Sramana Mitra: Terrific. Very interesting. I love the organic nature of the company building. Whatever you are doing today in terms of financial engineering, you’ve built it up to about $150 million to $180 million with no financing. That is remarkable. I’ve enjoyed talking to you.