Rocket’s Varun Krishna Thinks Redfin Deal Can Expand Opportunities For Broker Network

Monday’s breaking news that Rocket Companies is set to acquire online real estate brokerage Redfin shed light on the changing landscape of the homebuying marketplace. In an exclusive interview with HousingWire, Rocket CEO Varun Krishna said that having a hand in the entire real estate funnel gives Rocket’s broker network “a bigger piece of the pie.”

“We think about it more like opportunity. … So when you look at Rocket’s strength in mortgage with Redfin’s leadership and home search and brokerage, what we’re doing is simply allowing our broker network to get access to a bigger ecosystem,” Krishna elaborated.

“This is really an opportunity to expand the reach of our ecosystem and to create more demand and more business for every person that plays in our ecosystem, whether they work at Rocket, or whether they’re one of our most valued broker partners.”

Shared brand values

Rocket’s year to date has been marked by a series of changes in the company’s outreach and branding. Notably, the company recently launched its AI-powered website, Rocket.com, brought on Katie Sweeney as executive vice president of broker advocacy for Rocket Pro, made a Super Bowl commercial comeback and kicked off a companywide rebranding campaign.

That raises the question of whether Redfin will rebrand itself to align under Rocket’s umbrella or maintain a separate identity.

“The value of Redfin’s brand has incredible value, especially when you look at things like search engine optimization, the fact that they have nearly 50 million active users, and so what we think is great is there’s an opportunity here to create added value to the Rocket brand by integrating Redfin into it,” Krishna said. “We think we can create a stronger overall brand by really optimizing the interaction between these brands.”

Rocket, which also ties its branding to empowering consumers to enforce the power of choice, acknowledged that the seismic transaction impacts the financial services market in terms of consumer choice and industry competition.

“Consumers have choice in how they search for homes, choice in which agents they use, choice in what type of financial product they want, choice in how they think about title of closing,” Krishna said.

“And so what we want to do is just simply focus on the experience of buying and selling the home. How do we just allow you to have as much choice as possible to make sure that we are empowering you, but we make the experience of buying a home easier, faster, cheaper? And so for us, that’s really the focus area.

“It’s more about enabling consumers to have more power than it is about a redundant voice. You know, today, the market is fragmented enough as it is. No player is more than 2.8% share in purchase (lending). For us, it’s just a massive market, and we just want to make things easier for the consumer.”

Krishna went on to say that Redfin’s and Rocket’s shared values for integrating data and artificial intelligence in the homebuying experience was a catalyst for the transaction.

“We have about 10 petabytes of data in our data platform; Redfin has four. And so with this deal, we effectively increase the dataset of the company by 40%,” he shared. “The second piece is the experience [because] today when you think about homeownership, it’s fragmented. … It’s also expensive. What we can do with this acquisition is we can create one single experience that’s highly personalized, where we have a better contextual understanding of who the homebuyer is. That’s the excitement that we think AI provides, because you have access to the data and the relationships all the way through the transaction.

“Someone needs to take a shot at simplifying [the homebuying process] and we’ve always stood for that as Rocket. Redfin has always stood for that, representing the front end of the funnel. When you look at Redfin as a data and technology company, you realize that this is an incredibly undervalued company. The distribution, the scale that they have, the connection to their brand, the network of Realtors and agents, the daily active use, the monthly active use that they have, it is incredible. And when you connect that to the scale of the mortgage platform that we’ve built over 40 years, we think that that creates a multiplier effect.”

Redfin shares the news

In an email to Redfin employees that was also posted on Redfin’s website, Redfin CEO Glenn Kelman echoed Krishna’s sentiments and explained the decisions behind Redfin closing the curtain on its 19-year independent journey.

“In anticipation of closing this acquisition, I feel sure that Rocket could take all the other good things about Redfin and make them bigger too: our mission, our innovation, our reach, and our commitment to getting the best from one another.

“This deal should not only give Redfin.com more exposure, it will also make the site better. Our AI algorithms will gain access to new troves of data … we expect that a Redfin.com home-shopper will be able to schedule a home-tour, find out what she can afford, then get pre-qualified for a loan, on-demand, in a matter of minutes.”