SoftBank-backed Real Estate Brokerage Compass Aims for $10B Valuation in NYSE Debut

Venture-backed real estate brokerage Compass is aiming for a $10 billion valuation when it lists on the New York Stock Exchange, according to an updated filing with the U.S. Securities and Exchange Commission on Tuesday.

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New York-based Compass has raised around $1.52 billion in funding from investors including the SoftBank Vision Fund and IVP, and it was last valued at $6.4 billion by private investors, according to Crunchbase data.

The company plans to offer 36 million Class A shares for $23-$26, according to Tuesday’s filing. It will list on the NYSE under the ticker symbol COMP. The underwriters for the offering are Goldman Sachs, Morgan Stanley and Barclays.

Compass generated revenue in 2020 of $3.72 billion, up 56 percent year over year. Its losses for the year came out to $270.2 million, down from $388 million the year prior.

The company operates similar to a traditional residential real estate brokerage, but has differentiated itself with technology and tools like an in-house customer relationship management system and marketing software suite, as well as competitive perks and benefits for agents.

The company says it now works with more than 19,000 real estate agents across the country and has facilitated more than $300 billion in gross transaction volume through its platform since 2012.

Compass’ operating costs are its commission and transaction-related expenses, according to regulatory filings, with the company spending more than $3 billion in that category in 2020. Sales and marketing was the next largest operating expense, with Compass spending nearly $408 million in that area last year.

Its impending IPO coincides with a surge in U.S. homebuying that pushed existing home sales to a 14-year high in 2020, according to the National Association of Realtors.

As of earlier this month, venture-backed startups in the real estate and real estate investment space had raised at least $962 million in funding globally already in 2021, according to preliminary Crunchbase data, and more than $8.7 billion since March 2020.

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