• 0
  • Home
  • About Us
  • What We Do

Shopping Cart

GPAM
  • Home
  • About Us
  • What We Do

After $370M funding round, Compass back under IPO spotlight

Compass Founder & CEO Robert Reffkin (Credit: Michael Toolan, iStock)

Compass Founder & CEO Robert Reffkin (Credit: Michael Toolan, iStock)

After raising another $370 million, the only thing standing between Compass and an IPO is time.

The New York-based brokerage — now valued at $6.4 billion — announced its latest round Tuesday, eliciting a new round of speculation as to when it may go public.

Robert Reffkin, CEO and co-founder of the firm, acknowledged Tuesday that going public was in the cards.

“Look, we’re likely going to have an IPO,” he said during an interview on CNBC’s Squawk Box. “But we’re fortunate, given our capital base, that we have flexibility in timing.”

It’s a line Reffkin has used before.

Launched in 2012, Compass has now raised more than $1.5 billion from investors. It’s used some of that money to recruit top agents across the country with bonuses and high splits, as well as acquire leading firms in gateway markets. That spending has attracted criticism that while the firm may be great at raising money, it’s not really building a sustainable business and is dependent on a constant stream of outside capital to stay afloat.

Squawkbox host Andrew Ross Sorkin made a point of asking Reffkin whether Compass had pivoted from its “straight-up” tech strategy, noting that its revenue gains have come from rollup acquisitions like Pacific Union International and Alain Pinel in California, and Stribling & Associates in New York.

“I think in the future you have to be both,” said Reffkin, describing a hybrid tech-brokerage model. “The future of this industry will be the first where there’s a place where you can search and do the transaction on one platform,” he added. “That’s what we’re building.”

A steady stream of hot companies going public have turned 2019 into what Fortune magazine dubbed “the year of the giant tech IPO,” prompting some to wonder if Compass’ investors may be ready to cash out now. As of mid-May, six venture capital-backed tech companies had gone public, raising $13 billion.

“There’s never been a better time to tap the IPO market,” said Zach Aarons, co-founder of MetaProp, a real estate VC fund and accelerator. “It’s one of the best IPO windows for tech companies I’ve seen in my career,” he added, describing the market as “ebullient.”

Despite Uber and Lyft’s disappointing debuts, several other tech IPOs have taken off. Pinterest is now trading at $28.27 per share, up 15.6 percent from its debut in April, while shares of the video conferencing company Zoom are up 32.71 percent and Crowdstrike, a cybersecurity company, are up 30.59 percent.

Compass’ march toward a public offering also reflects a maturing real estate tech sector. Investors that bet on real estate tech in 2012 and 2013 “are looking to have exits,” said Michael Beckerman, CEO of CREtech. “It’s a natural reflection of where we are in the cycle that companies are going to start to go public.”

For Compass, the catch could be the lackluster performance of rivals like Realogy, whose market cap has plummeted to $569 million, compared to $3.3 billion last year. As of midday Tuesday, Realogy’s shares were trading just above $5 – despite getting a temporary boost from an announced partnership with Amazon.

To avoid the same fate, Compass needs to sell itself as a tech company to Wall Street, Aarons said. Investors in the Series G round include Dragoneer Investment Group, a backer of late-stage companies, as well as the Canada Pension Plan Investment Board, SoftBank’s Vision Fund and the Qatar Investment Authority.

Compass said the new money will accelerate growth in product and engineering, as well as core products like Compass Concierge, which fronts the cost of home repairs for sellers.

But competition is picking up — and not just from traditional players. Tech-enabled brokerage firms like Side Realty and REX Real Estate are gaining steam.

Jeffrey Berman, general partner of Camber Creek Capital, said he’s seen a “marked uptick” in tech brokerages crossing his desk.

“As these companies mature,” he said, “It will be interesting to see what Compass’ competitive matrix looks like.”

Real estate firm Compass announces $370 million in new funding from CNBC.

Powered by WPeMatico

  • 30 July 2019
  • The Real Deal
  • Uncategorized
  •  Like
Developer plans to build tower in Historic Filipinotown →← This Beverly Hill mansion with echoes of Dean Martin hit the market for $75M
  • Recent Posts

    • LA County greenlights self-certification for Altadena rebuilding May 8, 2025
    • Irvine Company aims to transform golf course into village of 3K homes May 8, 2025
    • Former LA police commissioner, prominent attorney to list Bel-Air estate for $24M May 8, 2025
    • Movers: Gambino Group nabs LA, NY agents May 8, 2025
    • Sacramento investor lists 270K sf DTLA office park leasehold May 8, 2025
  • Recent Comments

    • Archives

      • May 2025
      • April 2025
      • March 2025
      • February 2025
      • January 2025
      • December 2024
      • November 2024
      • October 2024
      • September 2024
      • August 2024
      • July 2024
      • June 2024
      • May 2024
      • April 2024
      • March 2024
      • February 2024
      • January 2024
      • December 2023
      • February 2023
      • January 2023
      • December 2022
      • November 2022
      • October 2022
      • September 2022
      • August 2022
      • July 2022
      • June 2022
      • May 2022
      • April 2022
      • March 2022
      • February 2022
      • January 2022
      • December 2021
      • November 2021
      • October 2021
      • September 2021
      • August 2021
      • July 2021
      • June 2021
      • May 2021
      • April 2021
      • March 2021
      • February 2021
      • January 2021
      • December 2020
      • November 2020
      • October 2020
      • September 2020
      • August 2020
      • July 2020
      • June 2020
      • May 2020
      • April 2020
      • March 2020
      • February 2020
      • January 2020
      • December 2019
      • November 2019
      • October 2019
      • September 2019
      • August 2019
      • July 2019
      • June 2019
      • May 2019
      • April 2019
      • March 2019
      • February 2019
      • January 2019
      • December 2018
      • November 2018
      • October 2018
      • September 2018
      • August 2018
      • July 2018
      • June 2018
      • May 2018
      • April 2018
      • March 2018
      • February 2018
      • January 2018
      • December 2017
    • Global Property and Asset Mangement, Inc.
      137 North Larchmont
      Los Angeles, California 90010
      +1 213-427-1127

    © 2025 GPAM