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Jeff Corn discusses Virtuance’s recent acquisition by Diakrit and the growing importance of digital assets in real estate

Last month, Denver-based Virtuance, one of the nation’s largest providers of real estate photography and virtual tours, announced that it had been acquired by global real estate marketing firm Diakrit.

The acquisition brings together two leaders in real estate asset generation, previously operating on different sides of the Atlantic, to create one of the world’s largest providers of real estate photography, videography and digital marketing assets.

FinLedger spoke with Jeff Corn, co-founder and CEO of Virtuance, about the acquisition, what it means for both organizations and his views on the future of real estate marketing assets.

Q: First off, can you just describe Virtuance and the services you offer?

A: Virtuance is a photography and visual marketing provider to the real estate space. What that means is that we offer visual marketing assets for real estate listings, and that includes everything from photography to virtual tours to drone images, video to listing websites and social media integrations. [It includes] everything that a listing agent or an institutional owner of real estate would need to market the properties effectively and at scale.

Q: What would you say your biggest clients are?

A: Right now about 60% of our business is listing agents. It’s brokerages, individual agents and real estate teams. The other 40% are institutional real estate owners and managers. That’s everybody from the largest iBuyers to household names, like the biggest institutional owners of real estate and large hedge funds. I’m happy to name some clients to put things into perspective. Blackstone, Orchard and Zillow are clients. These are the bigger institution players who have needs to create absolute consistency in their marketing of properties, at scale and in a fully automated way.

Q: Virtuance was recently acquired by Diakrit, a global real estate marketing firm. Can you talk about how that came about and what it means for Virtuance?

A: We had a ton of inbound interest, unsolicited, that I think was precipitated by two things. It was our growth and the solutions that Virtuance brought to the table that really reached maturity around 2019. We had a vision from 2010, building this entire ecosystem that includes all sorts of technology around image processing and fully automating the image processing file, to full automation of all of the logistics associated with scheduling and actually getting the assets [and] the orders, where they need to go and then getting the actual assets out to where they need to go.

The last piece of our tech’s tripod, if you will, is what we call the virtual marketing suite. That’s a digital asset management platform for our customers to be able to actually manage all the assets for all their listings. So to get to your question, specifically around 2018 is when we really had maturity as far as that product set. Around the same time, COVID certainly had an influence as well on the value of these assets, and visual marketing and digital marketing in general just skyrocketed as a result. It’s around that time we received a ton of inbound, unsolicited interest in the company.

We were certainly not in the market, but Diakrit approached us about eight or nine months ago. They were among others who approached us, but it became very clear that there was such a compelling value proposition to the combined entity. So much synergy from a technology standpoint, customer standpoint and shared assets. It was described by one of the executives on their team once we got to know each other, as he said, ‘We feel like we were twins that were separated at birth, and now we’re finding each other again and we’re able to talk about like what we’ve done in the last ten or 20 years.’ We’re built from the same cloth. That’s really the feeling that is shared amongst both the teams. They really are the European counterpart to what we’ve done, and they have the same exact mission that we do. It became really apparent that through shared cultures and values, we’re going to be very well positioned to be a leader across the globe.

Q: Doubling down on what you said about reaching maturity right before COVID: can you talk about the biggest changes you’ve seen due to the pandemic and since?

A: I think that the biggest thing that I’ve seen is that there’s been this need to educate the real estate space about the importance of visual assets for so long. The story I’ve always told is you look at Nike and how they sell their shoes, right? You look at McDonald’s and how they sell a $2 hamburger. What goes into creating the visual asset that is going to market that product is profound. These companies are spending hundreds of millions of dollars on marketing these assets and figuring out the best way to do it.

Yet in the real estate space, even though the technology has been there, generally speaking the market has not put any energy, let alone money into marketing the largest asset most people will ever own in their lives. That, to me, always made no sense. When you say what’s the biggest difference, or what was the catalyst that occurred with COVID, it greatly accelerated that education. You could argue that the hard work we’ve been trying to do over the last 12 years in educating the market, it took COVID to really accelerate that and be much more effective for the market than we ever could have been. In educating the market on the importance of these assets, and marketing the assets to their fullest. That’s the biggest thing.

What does it mean? It means that real estate agents who are successful today are spending more money on marketing than they ever have. For a much better product than they’ve ever received. It also means that there’s a ton of innovation in this space, which is really exciting. I think something that’s very important, that hasn’t gotten nearly as much press as I think it deserves to get, is the FHFA’s approval of desktop appraisals. How is that related to what we’re doing? Well, we are already playing in that space because we are the ones who are capturing all of those assets upfront. If there’s a huge bottleneck in the real estate transaction, I think most people would agree that one area that exists is in the appraisal process. There’s a huge opportunity for Virtuance and Diakrit to completely accentuate the value of the assets we already have, exponentially, because now they’re able to be used in an appraisal process.

Q: Does that new desktop appraisal approval present new challenges? What needs to be done to meet those appraisal standards?

A: The technology is there, we’ve built it. The network is there, we own it. The team is there. We’re already producing assets that are FHFA approved for appraisal, and we’re doing it in a way where we’re combining the marketing and appraisal assets in the same, one asset. I think that is pretty mind blowing, as far as the transition that it will create in the space. It’s very different from what exists today for real estate agents. Today, the way a transaction happens is you do all this pre-list stuff. One of the things you do is marketing, and then once you have a contract you hire an appraiser or you hire an inspector. That’s all side-by-side stuff, but what needs to shift is that in order to take advantage of the technology that already exists, there needs to be a fundamental shift.

I firmly believe there will be a time where gathering all of the data that is necessary to complete a transaction happens at the very beginning of the transaction. So that you don’t have to rely on, ‘Okay, now there’s a buyer. Who’s got to do all this other work?’ Instead, it’s ‘here’s a property that is coming to market, all the data that is needed to close this transaction already exists.’ We just need the buyer to come in and make the offer. That’s a fundamental shift that I believe will occur over the next few years, and we plan to be at the center of it.

Q: What are some challenges that you deal with now, and also some challenges you’re looking forward to tackling moving forward?

A: Everybody’s challenged by the inventory environment. There’s no question and so what we see happening is a fundamental shift in the way that properties are financed. The fact is, that will change the inventory environment one way or another. I think that’s the one fundamental thing that we’re challenged by, but it’s not unique to us. It’s the fact that we’re living in this unprecedented time. I’d be lying if I said I had my head all wrapped around it all, and could explain exactly why everything’s happening the way that it is. At the end of the day, in order for any market to function, there needs to be transactions. We’re actually encouraged, frankly, by mortgage rates rising, because we believe it creates a healthier market long term. These are things that need to shake out post-pandemic, but that’s certainly the biggest challenge right now.

Q: What are your big goals moving forward?

A: We’ve got a really aggressive technology roadmap. We’re flying out to Sweden this afternoon to begin strategically planning for the next year, so that’s super exciting. We’ve got some really, really exciting tech that we’re going to bring to the space, that everyone will hear more about over the coming months. At the end of the day, we are going to be the global leader. We’re going to be the premier global solution for property marketing.

What does that take? It means Virtuance is currently in 37 cities around the country, and with this combination of forces with the acquisition, we now operate in five countries and have the largest network of certified real estate photographers and property scanners in the world. There’s just this huge opportunity that we are super excited to take advantage of over the next 12 to 24 months and beyond, by virtue of introducing a product to the market. One that has never existed, which is one single global property marketing solution across the globe. There’s been so much fragmentation in this space, and it’s made it very difficult to create the right brand for somebody who has properties all over the country or the world. We’re changing all that.

Q: Is there anything else I haven’t asked about that you think I should know?

A: One thing that is very important to me as a founder, and we’re super pumped on, is the fact that everybody is coming with us in this transition. Diakrit is super excited about our technology, but they’re also super excited about our team. There are no changes whatsoever from a management or leadership standpoint, and none whatsoever from an entire team standpoint. I certainly pride Virtuance, it’s not about me, it’s about us as a company and a culture, that over 12 years we’ve been bootstrapped from day one. We’ve had double and triple digit growth every single year, and we’ve also never once laid off employees and that continues through the transition in the acquisition. That’s something that I think in today’s world is less about PropTech, it’s more just about the state of the world and startups and VC. I think it’s a great model for what can happen in the world with growing a company and providing a fantastic solution and value to customers, that’s not at the expense of anybody.

In other recent proptech news, Dwellwell emerged from stealth with a $12 million seed round for its property “Check Engine Light” AI sensor technology. Playhouse also announced a $2.8 million seed round for its new “TikTok-like” real estate search platform.

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