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Shares of real estate technology firm Compass rise slightly on NYSE debut
In a sign of mixed investor reaction to recent initial public stock offerings, shares in SoftBank Group Corp.-backed real estate technology firm Compass Inc. rose slightly on their public debut on the New York Exchange today before softening in later trading.
The company offered 25 million shares in its IPO at $18 per share, a figure significantly lower than an initially planned 36 million shares at $23 to $26 per share originally planned for the IPO in March. The shares opened trading at $21.25, up 12% before closing regular trading down more than 5%, to $20.15.
Founded in 2012, Compass offers a technology-driven real estate platform for home buying, selling and renting by combining proprietary market insights and integrated mobile and web technologies. Described as providing a “revolution in real estate,” the company’s end-to-end platform is said to support the entire buying and selling workflow by pairing the industry’s top talent with technology to make the search and sell experience intelligent and seamless.
The company operates in 31 U.S. markets working with 18,000 agents delivering what it claims to be the country’s largest independent real estate brokerage.
According to figures from the company, Compass saw a surge in online home transactions during the COVID-19 pandemic, with revenue jumping 56% last year, to $3.7 billion, but it’s not yet profitable. Compass booked a loss of $270 million in 2020, though that was down from $388 million in 2019.
Compass first hit unicorn status in August 2016 with a Series C round of $75 million and has continued to raise money since, including $450 million from SoftBank in December 2017 and $400 million more from SoftBank in September 2018. Prior to its initial public offering, Compass had raised $1.5 billion, according to Crunchbase.
Although SoftBank is one of the world’s most prolific investors, its real estate plays haven’t always worked out as well as planned. SoftBank was also the lead investor in troubled workplace provider WeWork.
Other investors in Compass include Tech Pioneers Fund, Qatar Investment Authority, Dragoneer Investment Group, Glynn Capital Management, Canada Pension Plan Investment Board, Fidelity, IVP and Alumni Ventures Group.
Photo: Compass
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