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Redfin is now a $500 million company

November 13, 2013: 9:41 PM ET

Online real estate company raises $50 million in pre-IPO round.

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FORTUNE -- Online real estate company Redfin has raised $50 million in what it believes will be its last round of VC funding before going public.

Tiger Global Management led the round, and was joined by T. Rowe Price Associates and existing investors Greylock Partners, Globespan Capital Partners, Draper Fisher Jurvetson, Vulcan Capital and The Hillman Company.

Fortune has learned that the deal was done at around a $500 million valuation, and that it was competitive.

Redfin CEO Glenn Kelman declined to discuss valuation, but acknowledged that this is being viewed as a pre-IPO round.

"We wanted to make sure we understood how public market investors would view and understand us and our story," he explains. "Bringing Tiger and T. Rowe in gives us that, while still letting us make some long-term investments in our business that may have been more difficult as a public company.

Redfin sometimes gets compared to Zillow (Z) and Trulia (TRLA), but really is more of a tech-enabled brokerage than it is a lead generation service. The company enables users to list their properties via a combination of the company's online platform and Redfin-employed brokers, rather than third-party brokers who are essentially licensing the brand of large real estate companies.

Kelman says that the company currently has between a 3% and 4% market share in its hometown of Seattle, and expects to hit similar numbers in markets like Washington, D.C., Los Angeles, San Francisco and Boston. "If we reach 5% just in the markets we're already in, that would be $1 billion in revenue," he says.

One key for Redfin is expanding its demographic reach. The company originally launched by appealing to tech-savvy early adopters -- like engineers at Amazon (AMZN), Google (GOOG) and Microsoft (MSFT) -- but Kelman noted that one of his brokers had just sent over a photo of a 92 year-old client. "Part of our demographic growth is simply that a 35 year-old in 2008 is now 40, still wants to use our service, only this time to buy a nicer house," Kelman says. "But it's also just about getting more visibility and referrals in each market."

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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