Compass Files for IPO as Revenue Surges
March 2, 2021
A booming housing market led the tech-powered real estate brokerage Compass to announce on Monday that it’s going public through an IPO.
Compass reported a 56% growth in revenue over the last year. Compass has benefited from venture capital money fueling its rapid growth in the residential real estate business. Its revenue grew to $3.72 billion last year compared to $2.39 billion in 2019. Compass’ net loss declined to $270.2 million from $388 million a year earlier.
When the pandemic initially came to the U.S. last spring, Compass—like other real estate firms—braced for a downturn. Compass cut its staff by 15% in March 2020, but real estate rebounded quickly in the second half of the year.
Compass’ total transactions rose 66% in 2020, despite the pandemic, according to the brokerage’s IPO filing.
Compass has been backed by SoftBank Group Corp. It was last valued at about $6.4 billion in a 2019 financing round led by SoftBank’s Vision Fund, CNBC reports. The SoftBank Vision Fund also has invested in other quickly rising firms, including iBuying giant OpenDoor and co-working office firm WeWork. OpenDoor went public in 2020, and its net worth has since grown to more than $17 billion. SoftBank owns 35% of Compass’s Class A shares, CNBC reports. Other investors in Compass include Goldman Sachs, Canada Pension Plan Investment Board, and Dragoneer Investment Group.
Compass has raised $1.5 billion so far, Reuters reports.
Founded in 2012, Compass has grown to more than 19,000 real estate professionals across 46 metro areas.
“Real Estate Brokerage Compass Files for IPO Amid Pandemic Boom in Housing Prices,” CNBC (March 1, 2021) and “SoftBank-Backed Compass Makes IPO Filing Public, Reveals Revenue Jump,” Reuters (March 1, 2021)
Updated: April 09, 2021