Market Leader Story: Helping a Real Estate Software Company Reclaim Its True Identity and Grow

Sometimes it takes more than one acquisition before a company can find its true home.

That’s what happened to Market Leader, a real estate software company that was acquired “three times” in the span of just a few years. First, Trulia acquired it in 2013, and then Zillow, another real estate business, nabbed it in early 2015 by acquiring Trulia.

The third time turned out to be the charm, as in 2015, the real estate software company joined with Perseus, an operating group of Constellation Software, and resumed its path of innovation and growth in the real estate software market. This was the last time Market Leader was acquired – as Constellation’s hold time is “forever.”

“I turned 50 the same month that we were acquired by Perseus, so it was a phenomenal birthday present. They came in and said, ‘We’d like you to run this business and figure out how to grow it – we’re not going to tell you how to operate it.’ I knew right away that we were in good hands.” Scott Smith, the President of Market Leader

Driving Lead Generation Technology in the Real Estate Market

Market Leader provides real estate agents, brokers and franchises with an industry-leading customer relationship management and marketing system that helps them generate new leads and keep track of their customers.

Founded in 1999, Market Leader started out as an online lead generation company that quickly evolved into a software-as-a-service organization – to provide its customers with a broader range of tools and services.

Market Leader currently serves over 225,000 agents across the United States and Canada, with the goal of delivering outstanding products, leads, education and customer support.

Looking for a New Home

Zillow wanted to find a good long-term home for Market Leader to provide its customers and employees with even more opportunities for growth and innovation.

Carving Out a New Future

Perseus turned out to be a great option for everyone involved since it wanted to help Market Leader grow – both organically and acquisitively.

Establishing trust                              

Market Leader’s transition from Zillow to Perseus didn’t happen overnight – because Perseus initiated the negotiations early to ensure both parties trusted each other.

“There was a high level of comfort when it came to closing that deal,” said Scott Smith, the current President of Market Leader, who’s been with the company since 2002. “By the time the negotiations were over, we were sure that everything would go smoothly – and it did.

Aside from gaining Zillow’s trust, Perseus also took its time to obtain an in-depth understanding of Market Leader’s business performance and position in the industry, drilling down to individual industry partners, contracts and revenue sources.

“It was clear from the beginning that Perseus understood the real estate market,” said Smith. “That’s why the team wanted to do its due diligence to make sure Market Leader was well-positioned for success.”

All this preparatory legwork has resulted in a quick and straightforward transition process that has left everyone happy, including Smith.

“It wasn’t a stressful process at all,” said Smith. “I felt secure in the knowledge that Perseus wouldn’t do anything to compromise our business. And I was right.”

“Perseus was very different from the other potential buyers, such as private equity firms. It was clear to me that those firms were interested in buying Market Leader to build it up for two to three years and then sell it. Perseus wasn’t going to do that.”

Rebuilding the business

As an investor in vertical market software, Perseus wanted Market Leader to go back to its roots of being a real estate software business, which imbued everyone at the company with a renewed sense of energy.

“Knowing that we’d be able to invest in growing the business was a pretty big boon to everybody here. After the acquisition, we rallied the team around customer success, focused on our core financials and worked on retaining our employees, so that we could build on our stable workforce.”

For the first six to nine months, Market Leader’s sole mission was to rebuild the business.

Connecting with similar businesses

Though rebuilding a business is never an easy task, Market Leader didn’t have to struggle with it because it was able to connect with other Constellation Software companies in the real estate space and access their metrics and best practices.

“I got to see how we can expand and own another real estate business or two, taking what we’ve been doing at Market Leader and applying it to those businesses,” said Smith. “By the time we made our first acquisition, we had been with Perseus for 10 months. We rallied the team to figure out how to scale and extend what we do in one business, so that we could do it in acquisition number two, three, four and five in the coming years.”

What’s in Store for the Future?

Over the past 10 years, Constellation has acquired a number of real estate software companies. It has recently integrated these into one portfolio that Smith is now running.

“I’ve gone from running one real estate software company to overseeing and developing our real estate software portfolio which includes Market Leader, SharperAgent, Z57, Zurple, Constellation Web Solutions, Birdview and Diverse Solutions,” said Smith. “It’s a great opportunity to be involved with all these companies strategically and operationally.

With solid funding and support from its new parent company, the Constellation Software Real Estate Group will continue growing by building new relationships with other businesses and cultivating possible acquisition targets.

“This year, I’ve been involved in close to 10 different acquisition discussions,” said Smith. “We’ve made offers on four or five of them and have successfully acquired one. And we’re only getting started.”


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