Real estate tech startup Compass announced that it’s getting an investment of $450 million from Softbank Vision Fund and a separate $50 million from secondary deals.
The company recently raised $100 million in an investment led by its new investor Fidelity, boosting its market capitalization to $1.8 billion. After successfully getting the Softbank investment, Compass will be valued at $2.2 billion.
This is not the first notable financial milestone for the company as it has kept a considerably good pace since its genesis. Back in 2012, when the startup was called Urban Compass, it raised $8 million in one of the largest-ever seed rounds back then.
The purpose of Compass’ $100 million funding from Fidelity was to grow itself fully across U.S.A, however, Ori Allon, the co-founder and chairman of Compass said that the plan has been updated to expand the company globally.
“We realized to hit the goal of where we want to be in the next two to three years – Compass everywhere, in every major city worldwide – we needed another partner, and that is the vision of Softbank is aligned with,” said Allon.
The Softbank Vision Fund is a $100 billion fund with partners like Qualcomm, Apple, Foxconn and a number of other Middle Eastern investors. The Fund has so far invested in Uber, Mapbox, Slack, WeWork and other including Compass now.
One of the main reason that made Compass a confident bet with founders is the company’s strong leading team including experienced and talented men of tech. Allon, who has an engineering background has already sold startups to Twitter and Google, and those startup technologies have been foundational to both of the giant’s search businesses. Moreover, Co-founder and CEO, Robert Reffkin spent five years at Goldman Sachs as a banker and owns a gilded background.
Another reason is Compass’ technology, which was originally visioned as a kind of disruptor to the business and potential of hyperlocal information. The platform provides a clutter-free, pared down, easy-to-read list of places that are briefly checked before being placed on the site. The places are matched with customer profiles, based on the area they are actually living in. As said by Reffkin, Compass is “powering the best of technology.”
Although Compass is not the only company to connect buyers to properties, it surely knows how to prove itself securing a prominent place in the field. The company is growing day by day, satisfying the current investors and attracting the future ones.
“Real estate is a huge asset class, but the sector has been relatively untouched by technology and remains inefficient and fragmented,” said Justin Wilson, a senior investment professional at SoftBank’s Vision Fund, in a statement. “Compass is building a differentiated, end-to-end tech platform that aggregates across diverse data streams to support agents and homebuyers through the entire process, well beyond the initial home search. With disruptive technology and unique data advantages, Compass is well-positioned for future growth in a sector that represents trillions in transaction volume.”
The company is soon to hit $350 million revenue, hitting 16,000 transactions and more than $14 billion in sales this year.