The U.S. real estate portal operator Ojo Labs has announced a deal to sell its Canadian operations to Royal Bank of Canada as well as a deal to raise debt from Vista Equity Partners.
The Royal Bank of Canada is the largest mortgage lender in its market and has been an investor in Ojo since 2018. The bank takes over Ojo Labs' Ojohome.ca portal and its 100 or Canadian employees as it looks to connect with Canadian house hunters further up the lead funnel.
The fresh capital will help the company compete with the likes of Zillow and Realtor.com in the U.S. housing market with Ojo's CEO John Berkowitz telling Insider that the combined deals are worth around $200.
"We put the company in an extremely healthy cash position, while others are having to retrench," Berkowitz told Insider. "It's in times like this that we accelerate our growth."
The injection of capital comes at a good time for Ojo with the U.S. housing market experiencing a downturn and the looming threat to its market share of a possible CoStar Group takeover deal for Realtor.com.
Austin, Texas-based Ojo operates the Movoto portal in its native market which it bought from Japanese real estate company Mitsui Fudosan for $62 million in June 2020. It is one of the few portals worldwide to employ a pure success-based business model with agents only paying up to 35% of their commission when they transact a lead.