Let Valuation Tech Help Improve Your Collateral Valuation

Join this webinar to learn how technological advancements in valuation provide solutions to help lenders and servicers deliver more comprehensive offerings to their clients.

Talking proptech with FinLedger Director Holden Page

In this episode, Page discusses the hottest topics coming across FinLedger’s news desk. Topics include: the online banking market, what’s happening in the proptech space and recent private market deals.

With a reinvigorated CFPB, what’s next for the NYDFS?

While the CFPB is reinvigorated under the Biden administration, there’s plenty of room for it to retake a leading role and coordinate with the NYDFS.

Does your CRM hurt or help the customer experience?

In real estate, data is king. The more you leverage your own data the better off your agents or loan officers will be because they’ll be able to identify, target and create better customer experiences.

IPO / M&AReal Estate

Compass files for IPO

Residential brokerage filed an S-1 with the SEC on Monday

SoftBank-backed residential brokerage Compass filed paperwork with the Securities and Exchanges Commission on Monday for an IPO.

Compass filed an S-1 document with the SEC, suggesting it would go public through a traditional offering. The document does not indicate how much money Compass plans to raise in a public offering, nor does it disclose price per share on common stock up for sale.

The brokerage, which has raised $1.5 billion in venture capital and achieved a valuation of $6.4 billion in July 2019, tapped Goldman Sachs and Morgan Stanley late last year to underwrite the IPO.

The Real Deal first reported news of the S-1 early Monday evening.

Founded in 2012 by Robert Reffkin and Ori Allon, Compass ended 2019 as the third-largest residential brokerage in the country, according to REAL Trends. It posted $91.2 billion in sales in 2019, double its figures from the year prior. But even with the gains, Compass lagged far behind Realogy – $176.3 billion in sales – and Berkshire Hathaway Homeservices of America, which has $135.9 billion in sales.

Real Estate Tech Virtual Demo Day

Real Estate Demo Day is designed specifically to help real estate industry decision makers identify the tech solutions they need to operate efficiently and securely. In a half-day format, tech companies will demo their platforms and answer your questions. You can tune in for the whole demo day, or strategically drop in on sessions to learn about specific solutions. 

Competitors no doubt are excited to see the numbers on its S-1. For years, rivals have said Compass used venture-capital riches to create an unsustainable business. They’ve questioned the supposedly ground-breaking technology, and complained that Compass achieved its size purely through acquisitions and large signing bonuses handed out to agents across the country, not good business fundamentals.

In recent months, Compass has made key personnel changes ahead of the IPO. It solidified its board by adding several new members, including Bridgewater Associates co-CEO Eileen Murray, former Oracle Corp. president Charles Phillips, businesswoman Pamela Thomas-Graham and LinkedIn executive Steve Sordello.

Compass, which has had something of a revolving door in the C-Suite, also added Greg Hart, a former Amazon executive, as its chief product officer, and brought on Glassdoor‘s Brad Serwin as general counsel.

In December, Reffkin sent a memo to agents telling them a Compass IPO would enable the brokerage to provide even greater levels of resources.

“Many of you have asked what the benefits are to Compass agents of being a public company,” Reffkin wrote, according to The Real Deal, which first reported the news. “Being public will allow Compass to raise capital that we can invest in more tools and more support to help you.”

Though the company laid workers off in the early days of the pandemic, it hasn’t stopped recruiting agents. It now has over 18,000 agents across the country, and Compass rebounded to cash in on record home sales in the ensuing months.

Compass positions itself as a tech-forward brokerage that has gradually branched out beyond brokerage – it offers a concierge service, facilitates bridge loans, has a title-and-escrow arm, and has deployed a bevy of resources into tech centers in Seattle and Hyderabad.

Prospective investors will likely look closely at the risks section of the prospectus. Compass is in litigation with rival Realogy, which filed a lawsuit in 2019 accusing Compass of “predatory” poaching and unfair business practices. Another lawsuit, filed by Avi Dorfman, who says he is a co-founder and is entitled to a huge share, is also ongoing.

Leave a comment

Most Popular Articles

Will we ever see a “normal” housing market again?

The question on everyone’s minds: When will this hot housing market cool down? Arch MI investigates this and more in its Spring Housing and Mortgage Market Review.

Jun 22, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please