David Williams’ Rate My Agent declares war on LinkedIn after new US deal

Melbourne investment banker David Williams is hoping to turbocharge Rate My Agent’s profits via a new deal that delivers more social media tools to real estate agents.

David Williams says Rate My Agent has about 285,000 agents on its platform in the US but ‘only a small portion are paying’. He plans to change that. Picture: Nikki Davis-Jones

Comparison website Rate My Agent has declared war on LinkedIn after the ASX-listed company snapped up a US social media content provider for $US4m ($6.03m), saying it will provide agents with a superior online network experience and catapult it to profitability.

Rate My Agent listed on the ASX in 2018 and allows home sellers and buyers to compare and review real estate agents. It charges agents a monthly subscription and one-off fees.

Chairman David Williams said Rate My Agent was profitable in Australia, with the “majority of active agents” on the platform, with about 30 per cent paying for its services. But in the US, despite having about 285,000 agents on the platform, “only a small portion are paying”.

“If 30 per cent of US active agents paid Rate My Agent the same level we see in Australia, Rate My Agent has the potential to be a very profitable company – about a $290m revenue opportunity,” Mr Williams said.

The company cut its annual loss by 24 per cent to $3.69m last year, while revenue firmed 6 per cent to $18.75m. Its share price has also been in a steady decline, falling from a high of 59c in January 2020 to 5.3c, valuing the company at $29.57m.

Mr Williams said he was hoping to further turn around Rate My Agent’s profitability by “coming after LinkedIn”, which Microsoft acquired for $US26.2bn in 2016 and which dominates the professional social media market.

“Rate My Agent is already the LinkedIn for real-estate agents,” Mr Williams said. “More and more professionals are making LinkedIn their primary platform, but more and more agents want Rate My Agent for its hard data and vendor reviews.”

The problem, according to Mr Williams, is that agents get a “sugar hit” when they post a new listing on Rate My Agent, another when they sell, and another when they get a review, “but in between silence”.

Rate My Agent allows home buyers and sellers to compare and review real estate agents.

This is where the company’s acquisition of US-based Curated Social, which provides agents with relevant content tailored for social media, is expected to help and generate future profits for Rate My Agent. Curated Social has more than 80,000 realtors in the US signed up, and Rate My Agent will extend its services to the near 400,000 agents it has on its platform in the US, Australia and New Zealand.

Rate My Agent also signed a strategic partnership with US brokerage Realty ONE Group to add a further 20,000 agents to its platform.

“Curated Social will enable agents to put out social media on a regular and automatic basis and be top of mind for people searching for an agent,” Mr Williams said.

“The US has 895,000 active agents and 285,000 already on the RMA platform. Realty ONE type deals should expand that number quickly and Curated Social will boost paying agents.”

Rate My Agent has also raised $3m via an institutional placement priced at 4.8c a share, which settled on Friday. It is seeking to raise a further $2m via a share purchase plan, also priced at 4.8c.

Originally published as David Williams’ Rate My Agent declares war on LinkedIn after new US deal