The Zillow Example
Making Money By Losing Money
Zillow is a real estate marketing site that displays home and apartment listings and other information related to the housing market. Zillow was founded in 2005 and since then has raised over $528 million ($87 million prior to going public), generated over a billion dollars in revenues and lost over $250 million. Zillow went public in 2011 at $20 a share and market capitlization of about $700 million. The share price of Zillow hit an all time high of about $144 in 2014. At its peak in 2014, Zillow had a market capitalization of about $6 billion.
Zillow has been a growth story since its inception. It has grown organically through sales and marketing and investment in technology. It has raised capital on its growth story and reinvested it in more sales and marketing and on acquisitions, often of other unprofitable companies with similar growth stories, like its acquisition of Rent Juice for $40 million. Zillow also has used its highly priced shares to acquire other unprofitable companies, like competitor, Trulia in 2014.
Here is how Zillow does it: How to Make Money By Losing Money