Real Estate Tech Startup "Compass" Raises $100M for Nationwide Expansion
By Maggie Wilson @ Real Estate Daily
December 5, 2017

Compass raised a $100 million Series E investment round with top contributions from Fidelity Investments, IVP, Wellington Management and other global investors. This brings their total capital raised to $325 million, which will continue to fuel the company’s nationwide expansion, potentially leading to an IPO down the road.

Key Takeaways

  • Compass is a venture-backed tech brokerage
  • Has its own agents and operates similar to websites like Redfin and Zillow
  • Expanding into 10 new markets with $100 million Series E investment round
  • Company now valued at $1.8 billion
  • Future IPO potential

Brief

Compass, a venture-backed tech brokerage, operates similar to other major listing sites like Redfin, Trulia and Zillow. They have their own agents and a polished website that allow users to navigate through listings in an incredibly user-friendly manner. You can sift through homes geographically in their interactive map or take a look at a curated list of top homes on the market in certain areas.

“Compass is building the infrastructure, data and tools that will power the next generation of this industry,” said Ori Allon, Founder and Executive Chairman of Compass. “This new funding will allow us to double down on our development of transformative technology, while fueling continued expansion into all of the top real estate markets in the country. Our long-term vision is for Compass to be everywhere as the world’s largest real estate platform.”

With the success of their latest investment round, Compass plans to branch out into 10 new regions, expanding their presence to a total of 20 major cities. The company plans on targeting cities like Austin, Charlottes, Atlanta, Chicago, San Diego and Seattle with their new expansion.

Compass has also been showing impressive agent growth, boasting a 500% increase in agent population over the last 24 months. Top real estate agents are attracted to Compass in part because of its extensive suite of tech tools. The company claims to help drive a 25% increase in revenue in an agent’s first year.

“Compass has proven that its technologically advanced platform is incredibly attractive to the industry’s top agents,” said Todd Chaffee, General Partner at IVP. “Their position at the intersection of technology and real estate gives them the unique opportunity to be the single largest holder of real estate data, ushering in a new realm of possibilities for agents and clients alike.”

Compass Chief Revenue Officer Rob Lehman told Inman that an IPO is definitely a possibility, but private funding has served the company well over its four-year lifespan. “We continue to evaluate every quarter what the right growth strategy is and what the most efficient and effective capital support strategy is, and if at some point we deem that should be in the public markets than we would certainly go down that path,” Lehman concluded.