In a major shift, San Francisco-based Avenue 8 said it’s shutting down the residential real estate brokerage side of its business in favor of selling its AI-powered real estate assistant Sidekick.
The company on Tuesday announced the “strategic realignment” to focus exclusively on Sidekick, its generative AI assistant for real estate agents, marking a new direction for the real estate technology company. It will transition away from providing brokerage services to its agents at the end of July as it accelerates Sidekick’s growth.
Justin Fichelson, co-founder and co-CEO of Avenue 8, told me that Avenue 8 had about 100 of its own agents in the Bay Area, twice as many in Southern California, 30 agents in New York and a handful in Miami. He said the company is sensitive to the impact the move will have on its employees and agents and will aid them through this period and as they pursue new opportunities.
“Everybody knew last week,” Fichelson said. “It’s a hard, emotional decision to say, ‘Hey, we’re going in a different direction,’ but it’s the decision that most makes sense. … The hardest thing is that we did build such an incredible team of agents and an executive brokerage team. It’s always hard to phase that out.”
Michael Martin, co-founder and co-CEO of Avenue 8, told me the company realized its go-to-market strategy was going to be involved in creating partnerships and selling to other brokerages and that the company’s leadership wanted to do that without raising competitive concerns.
“We wanted to go all in and we think we have a really unique opportunity and unique moment,” Martin said, noting that Avenue 8 recently grabbed an undisclosed amount of funding from Cox Enterprises.
Andrew Davis, senior vice president of strategy and investments at Cox Enterprises, said in a statement that Avenue 8’s decision to prioritize Sidekick will enable the company to meet the needs of a real estate industry “in the midst of its most dramatic changes in decades” and will “pay off down the road.”
Founded in 2019, the company quickly raised $4 million in a 2020 seed round led by Craft Ventures — the firm co-founded by David Sacks and Bill Lee. Avenue 8 was also backed by Zigg Capital and an early-stage fund from the founders of Warby Parker, Harry’s and Allbirds.
In May 2021 it announced $14 million in Series A funding co-led by Threshold Ventures and Craft Ventures.
Martin also told me the company has an unofficial relationship with OpenAI and has been beta testing some of their products.
Avenue 8 launched its Sidekick app — which trained on real estate workflows and MLS data — earlier this year after its engineering team began building it out in November, and has since received accolades for both Best AI Product & Service and Best AI Work & Productivity App at the 28th Annual Webby Awards.
For a subscription cost of $25 per month, users of the trainable tool have some extended options at their fingertips as are also able to create presentations, market reports and spreadsheets analyses and MLS searches with the app. It can also generate listing descriptions using computer vision, develop marketing strategies and content and manage email inbox and calendar updates via a conversational interface.
Last month, the brokerage announced a first-of-its-kind partnership with the San Francisco Association of Realtors to bring Sidekick to the organization’s more than 4,000 members and also partnered with the MIAMI Association of Realtors, the nation’s largest local Realtor group, as well as BeachesMLS, to bring Sidekick to over 100,000 agents and brokers across South Florida.
