San Francisco-based real estate brokerage Side announced Monday that they raised $150 million, ushering in a new phase for the four-year-old company.
Coatue Management, a New York City-based investment manager, led the venture capital fundraising round. Prior to the $150 million raise, Side reported raising just $63 million from outside investors, the majority of which came from a funding round led by Sapphire Ventures, according to Crunchbase.
Side, which now claims a $1 billion-plus valuation, will use the cash to “support significant hiring” and “accelerate the company’s national expansion efforts beyond its three operating markets of California, Texas, and Florida.”
Side is a “white-label” business model that provides the tech, marketing, and administrative resources (but not office space) for top-producing agents to start teams that feature distinctive brands.
For example, top Beverly Hills luxury producer Ben Bacal started the brand “Revel Real Estate” under the Side brokerage. Bacal and his team members, like all Side agents, keep 90 % of each sales commission, with 10 % heading toward the brokerage.
Diversification is one approach brokerages can adopt to help ensure stability in unavoidable times of uncertainty, work to protect their revenue and – ultimately – financially weatherproof their business.
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All brokerages claim to feature quality agents, but Side goes a couple of steps further.
The company’s motto is “Not all agents, only the best.”
In an interview last year, Side CEO Guy Gal said many agents are “hucksters and charlatans” and, “Nine out of ten agents shouldn’t be licensed, let alone actually doing transactions.”
Gal also expressed regret at the time about his past business ventures (namely the video content producer Kingmaker) raising money too fast without a clear plan in mind. He said Side had “no rush to expand” to other high-end markets like New York.
Messages left with Gal on Monday were not immediately returned.
In a press release announcing the fund raise, Gal doubled down on Side’s “only the best” message, stating, “The incentives between brokerages and top agents are misaligned. Existing brokerages are designed to support average agents.”