An Antidote to Blind Auctions: Online Real Estate Auction Company Raises $34 Million

Ryan O’Connor, CEO of Unreserved, said the nearly $34 million seed investment will be used to grow the current workforce of 90 people, mostly in Ottawa, to 160 by the end of the year. ‘year.

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Bidding began mid-morning on Thursday for a two-story detached house in southwest Barrhaven. As of 2 p.m., when the online auction closed, the price of the home at 2622 River Mist Rd. had jumped from $665,000 to $857,500. Thirteen unique bidders had submitted a total of 85 bids.

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“Twenty-eight hundred people were watching the event,” said Ryan O’Connor, CEO of Unreserved, the Ottawa-based company that developed the online auction software. “A lot of them were people wondering if they should sell their house this way as well.”

O’Connor, 46, had every reason to be enthusiastic. On the same morning, the Ottawa entrepreneur and former amateur boxer revealed his business had secured nearly $34 million in seed investment – the proceeds he will use to grow his current roster of 90, mostly in Ottawa. , to 160 by the end of the year, after an expansion project in Toronto.

Unreserved’s main selling feature – in addition to charging just one percent of the selling price – is an auction platform that allows potential buyers to instantly respond to competing bids for the property in question. A feature allows non-bidders to observe the auction as it unfolds.

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“We’re showing the industry there’s a better way,” O’Connor said, referring to the long-standing practice of home sellers collecting offers privately, leaving potential buyers in the dark. their position relative to competitors. This setup has proven to be extremely frustrating for many buyers over the past three years as dwindling inventory has sparked bidding wars in the majority of sales.

O’Connor was well placed to create an alternative. From 2016 until last fall, he was the founder and key leader of E Automotive Inc., which provides car dealers with access to a marketplace powered by online auctions. The company recently reported annualized revenue of US$80 million E Automotive raised $135.7 million in an initial public offering on the Toronto Stock Exchange last November, making it worth total merchant turnover of over $1 billion (which has since slipped to $755 million).

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Ryan O'Connor is the CEO and founder of Unreserved, which announced Thursday that it has secured a seed investment of $34 million.
Ryan O’Connor is the CEO and founder of Unreserved, which announced Thursday that it has secured a seed investment of $34 million. Photo by Tony Caldwell /Postmedia

O’Connor sold most of his personal stock just before the IPO. “I’m a startup guy, not a big company guy,” he said, adding that he holds “hundreds of thousands of shares” in E Automotive, which closed Thursday at $16.54. each. He invested some of the pre-IPO proceeds in Unreserved’s seed capital round, as did former Royal Lepage chairman Simon Dean and angel investor Jason Chapnik.

Judging by its ambition, O’Connor doesn’t expect Unreserved to remain a small company for very long. He predicts by the end of the year that he will have obtained 5% of the home sales market.

Consider what that would mean in the Ottawa market, where real estate agents associated with the Ottawa Real Estate Board sold 21,415 residential properties and condominiums last year for gross proceeds of $13.6 billion. Five percent of that translates to $680 million in gross sales, of which one percent, or not quite $7 million, would go to Unreserved.

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Of course, O’Connor is building a national business, including a big move this year to Toronto. His roots are firmly in Ottawa, beginning with his childhood on a family farm along Dwyer Hill Road. Indeed, he had planned to build E Automotive in Ottawa, but ran into an unexpected problem.

“Shopify had every software developer in town locked down,” he said, referring to the e-commerce giant. “When we tried to hire them, they were all waiting for their shares to vest.”

O’Connor was referring to the three- or four-year process in which Shopify employees acquired full ownership of the stock options granted to them when they were hired. O’Connor therefore moved E Automotive to Toronto, where most of its more than 700 employees work.

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