Xceligent bankruptcy – It’s a sad day in the commercial real estate data technology world, as CoStar’s biggest (and pretty much only) competitor, Xceligent, has filed for Chapter 7 bankruptcy and decided to close its doors effectively immediately.
If you try to visit www.xceligent.com, you’ll be presented with a dead page that looks like this:
When CoStar acquired LoopNet in 2012, it was required that CoStar sell some assets to Xceligent in order for CoStar to have a worthy competitor in the marketplace and not become a monopoly. However, this was not enough. The commercial real estate data business is brutal and extremely capital expensive. Just look at CoStar’s public financial filings and you’ll notice just how many resources go into researching, collecting data in order to provide the service. Xceligent and Digsy AI were working on a partnership and during the many of the conversations we had, we talked about how hard they work and the many financial-and-human resources that go into providing the service. CoStar sued Xceligent claiming that Xceligent was illegally getting data from their CoStar data suite. When the judge found evidence of fault with Xceligent, it forced Xceligent to pay up to $20,000 per incident. That’s a crazy fine considering how many listings and buildings there are — so naturally, it’s no surprise to see Xceligent go. After this, Xceligent booted Doug Curry as CEO, and replaced him with Frank Anton.
Back in November, Bisnow reported that the Xceligent’s parent company, DMGT, had written down the value of its Xceligent asset down to zero and was investigating options. We now know that the option the decided on was to shut down the business completely. In early December, Bisnow, reported that Xceligent and CoStar were in settlement talks, but now that Xceligent has filed for Chapter 7 and shut down its service, who knows what will happen to that. The Xceligent bankruptcy will have many negative ramifications for CRE.
It’s so sad to see Xceligent go. They were working on opening up their commercial real estate data to partners to fuel innovation in the commercial real estate technology space. I remember numerous talks about their API to allow services like Digsy AI and others provide increased value to the commercial real estate industry. With their size and open mentality it was really the only hope. CoStar doesn’t allow other services to integrate with their data, and I don’t blame them for that. If I was Andy Florence and knew the data is the main asset that keeps CoStar in business, I’d probably contemplate the same — however, it is not good for the commercial real estate consumer. It stifles innovation and greatly hinders the experience of the commercial real estate industry.
So who will we now have to step up to the plate and give us an alternative to CoStar?
There are players like 42Floors, RealMassive, Truss and many others — but none of them had the magnitude and size that Xceligent had. Much less CoStar. And if they try to go up against CoStar, you better lawyer up and accept that they will drive you out of business like they have done to Xceligent.
All in all, we need an alternative. As the CEO of Digsy AI – a technology company that caters to the commercial real estate industry, I believe we need “open technology companies” who allow us to enrich the data and user experience for customers. How will we achieve that and how long it will take? Who freakin’ knows.
What are your thoughts on the Xceligent bankruptcy? Would love to hear your thoughts in the comments below.
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