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Compass Raises $400 Million From Existing Investors in Series F Funding

Sep 27, 2018 9:08:46 AM

 

Compass announced that it had raised an additional $400 million, much from its existing investors.  Robert Reffkin shared his conviction that they could raise additional monies when and if they needed the funds for rapid growth at the REAL Trends Deal Makers Conference a month ago.  Subsequently they announced that they were acquiring Pacific Union.  And we are aware that more are in the works.

Compass will continue to be a major factor in the markets they are in and those they are entering.  They have proven over time the ability both recruit high quality agents and teams and to acquire existing brokerage firms.  It is clear that they are one of the major disrupting factors of our times and will continue down that path.

While they are a major factor, others such as the iBuyer programs which now include 5 major players, and such firms as eXp, HomeSmart and Realty One Group are also contributing to significant challenges to incumbents in the residential brokerage business.  In addition to these factors, the slowing of the housing market will contribute to some of the most challenging brokerage environments we have seen in many many years.  Brokerage firms of all kinds are well advised not to consider any of these factors passing fads.

 

Compass Announces $400 Million in Series F Funding

Investment will further national growth, deepen technology advancement and launch international expansion.

Compass, a real estate technology company, today announced a $400 million Series F financing round;
capital that will enable the company to expand internationally, continue to fuel its growth across the U.S,
and increase its investment in technology to further empower Compass agents and their clients. This
round is led by the Softbank Vision Fund and Qatar Investment Authority (QIA), with participation from
Wellington, IVP and Fidelity.

This investment will bring the total capital raised to nearly $1.2 billion. Since its founding in 2012, Compass has been committed to revolutionizing the real estate industry, reducing the friction associated with selling, buying, or renting a property by providing real estate agents with a set of powerful tools to increase efficiency and sales volume.

In 2018 alone, Compass more than tripled their agent population to over 7000 to-date, and launched in
key major markets including San Diego, Dallas, Seattle, Philadelphia and Atlanta, with plans to launch in
Austin, Nashville and Houston before the end of the year. Compass is on track to hit over $34 billion in
sales volume this year, more than doubling their 2017 sales volume of $14.8 billion. Last month,
Compass became the #1 independent brokerage in California after announcing their acquisition of Pacific
Union International.

The $400M Series F round positions Compass to:

• Accelerate its 2020 vision of gaining 20% market share in the top 20 cities in the U.S. by 2020
• Double down on technology: Compass plans to continue launching new products and initiatives,
creating one platform for the real estate industry
• Expand internationally

“Real estate is the largest asset class in the world, and we are excited to bring Compass technology to international markets,” said Ori Allon, Founder and Executive Chairman of Compass. “Our incredible track record of growth in the U.S. validates our vision and sets us up for the global stage. The support of our investors will strengthen the Compass mission to help everyone find their place in the world by advancing
our national and global expansion and continue building our agent productivity platform through technology and innovation.”

 

We will examine several different factors which influence the value of a residential brokerage firm which include, but are not limited to, strategic value, competitive value, market conditions, leverage, earnings consistency, network memberships, and stability.

 

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