Google Capital, the investment arm of the search engine giant will reportedly be putting in $50 million on Auction.com, the online real estate marketplace.
In its fourth official investment, Google Capital will not only buy 4 percent stake in the company but will also take two major positions at Auction.com. While one will join the board, another will take up the position of board observer, according to an official press statement.
"Google is the world's greatest Internet company, and we're thrilled to have the opportunity to work closely with them. This will give us an opportunity to tap into their deep expertise in digital marketing and mobile, as well as in building world-class products," Jeff Frieden, CEO and Co-Founder of Auction.com said in the statement.
The deal will value Auction.com at $1.2 billion. The online property market sold more than $7 billion worth residential and commercial real estate in 2013. It has been described as the 'eBay of real estate' as properties are bought and sold online, reports TechCrunch.
The deals are completely digitalized and the website offers a slew of properties including luxury residences and foreclosed homes to choose from. Buyers and sellers seal deals on the website and payments are made electronically. Auction.com takes 5 percent of each transaction.
"Auction.com has quietly built one of the largest marketplaces on the web. We think Auction.com can fundamentally change how real estate, and particularly commercial real estate, can be bought and sold, leveling the playing field for smaller investors," David Lawee, Partner at Google Capital added in the statement.
Although Google Capital formed in 2013, it was officially announced February 19. Just like Google Venture, the private equity fund hopes to invest in potential companies and boost their growth. According to the Wall Street Journal, Google has committed $300 million to the fund, which has already invested in Lending Club, an online financial lending firm and Renaissance Learning, an educational venture.
"While Google Ventures focuses mainly on early-stage investments, we'll be looking to invest in companies solely as they hit their growth phase. That means finding companies that have already built a solid foundation and are really ready to expand their business in big ways. We'll look across a range of industries for companies with new technologies and proven track records in their fields," Lawee wrote in the inaugural blog of Google capital.
The popularity of Auction.com is proof of the growing trend of taking the whole real estate experience online. People nowadays are more inclined towards looking at homes online and makin a pick from the large variety available in the online MLS.