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A New Orleans company that provides photos and other images to help real estate brokers sell properties is the latest local start-up to be swallowed up by a larger firm this year.
IMOTO, founded nearly 10 years ago by former real estate broker Darryl Glade and photographer Kris Haug, was sold together with RocketPhoto, a technology platform the two started four years ago with employee Hannah Walker Huppi, for an initial $5 million to Urbanimmersive, a real estate technology company based in Saint-Hubert, Quebec.
The acquisition is relatively small compared to the record-breaking deals of the last few months, when construction technology firm Levelset sold for $500 million and advertising data firm Lucid went for more than $1 billion. But it is another indicator of a good year broadly for local start-up companies, which have raised record investment dollars, according to a survey published last month by Tulane University’s Albert Lepage Center for Entrepreneurship and Innovation.
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Glade and Danish-born photographer Haug started the company, originally called SNAP Real Estate Photography, when they noticed there was a broader market for high-quality images in real estate. At the time, much of the industry relied on pictures taken by the brokers themselves or provided by clients that weren’t putting the property in the best light.
IMOTO, a portmanteau of the words “image” and “photo”, went from 80 to 700 individual clients in its first two years and now has 2,000 real estate brokerage offices in 11 states signed up.
Jon Atkinson, CEO of The Idea Village, the New Orleans entrepreneur accelerator, said the companies have fulfilled the promise they showed when the founders went through the program.
Photographer Kris Haug, one of the founders of IMOTO (formerly SNAP Real Estate Photography), using a 20-foot tripod to get good images of a condo in Metairie, in this 2013 photo. He is leaving the business after it was sold to Canadian tech firm Urbanimmersive for up to $7.3 million.
“They have revolutionized real estate photography locally, and nationally,” Atkinson said. “Anyone who looks at photos on realtor.com and noticed how they have improved dramatically since the mid-2010s has interacted with their product.”
Glade said the time was right to sell the company as it had reached a kind of plateau this year and needed something new to keep growing at the rate it had been.
“There’s been a lot of consolidation in anything real estate-related this year,” Glade notes. “In the photo space specifically, a lot of regional players like us have been growing rapidly and then we began to overlap.”
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At the same time, the need for the pricier real estate image products to help sell houses during the most restrictive months of the pandemic last year had waned. That meant that brokers were not as interested in paying for virtual video tours and 3D imagery, as potential buyers had resumed in-person tours of houses.
Also, the frenzied sellers-market conditions has meant there has been less need for marketing materials to help shift houses.
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Glade said he and his partners had turned down several offers for their companies from other similar operators but decided to take Urbanimmersive’s deal because it gave them access to technology that would allow them to market 3D and other products at “pennies on the dollar” compared to their current technology.
The deal also allows them to stay on and lead Urbanimmersive’s growth in the U.S.
“We were able to build a small business here in New Orleans and have a significant exit, and now we’re being asked to stick around and continue to grow because the acquiring company likes what we’ve done,” said Glade. “Now we have more tools at our disposal to build on.”
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IMOTO’s Mid-City headquarters currently employs seven and the firm has 60 contractors working in its various locations. Glade said they plan to hire more sales and customer service representatives for head office.
Haug has decided to leave the business. Glade said that he’ll be staying on as president and will be in charge of growing IMOTO’s business, including through further acquisitions.
The owners can earn a further $2.3 million on the sale of the business if the company meets sales targets, according to Urbanimmersive’s news release, which put IMOTO’s revenue in the latest fiscal year at $3.3 million.
Urbanimmersive, which is listed on the TSX Venture Exchange for smaller companies in Toronto, has a market value of about $23 million.
“We doubled sales for many years but in the last couple of years it had settled down and became harder to double,” Glade said. “We needed more behind us — capital and technology — to keep that rate going. This now feels more like the beginning of something new rather than the end.”