Irvine-based Auction.com said it received $50 million in investment from an equity fund backed by Internet giant Google.
Auction.com describes itself as eBay for real estate, with most of its sales coming from residential homes. The website allows clients to sell their property in an online auction. Auction.com usually asks clients to give 5 percent of the winning bid to Auction.com for residential home sales.
Last year, Auction.com sold roughly 35,000 residential and commercial properties. That amounted to selling $7.4 billion worth of real estate in 2013, compared to $5.7 billion in 2012, said Rick Sharga, executive vice president of Auction.com. The properties included commercial real estate that was part of the Glendale Gateway Project, which sold for $73.5 million in 2012 on Auction.com, Sharga said in an interview with KPCC. He declined to state the company's annual sales.
David Lawee, a partner at Google Capital, a growth equity fund backed by Google, said Auction.com has 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," Lawee said in a press release.
Auction.com's future plans
Sharga said Auction.com plans to use the money toward creating online and mobile products and hiring employees to support that development. He said the company has been profitable since it was founded in 2008.
"It's really about expansion," Sharga said.
He said in the future, the company would consider all of its options, including pursuing an IPO.
If the company decides to put itself on the market, don't look to Google to buy it. Google spokesman Tim Drinan said in an e-mail that the company has "no plans" to one day buy Auction.com. He said Google hasn't purchased any of the companies it has invested in through Google Capital.
Investment makes sense for Google
Robert Bridges, an assistant professor of finance and business economics at USC's Marshall School of Business, said he thinks Google's investment in Auction.com, is "a pretty logical step."
Bridges said Google sees the potential in Auction.com and can supply its information technology expertise and market dominance to help Auction.com better position itself.
As part of its $50 million investment, Google Capital will get to choose a representative to sit on Auction.com's board and another representative to be a board observer.
Auction.com employs more than 900 people.