Compass investors in line for payday, $100M for a flex-living startup

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Jan.January 18, 2021 08:00 AM

Which Compass investors have the most to gain?

Compass investors in line for payday, $100M for a flex-living startup

Compass investors could be in line for a windfall when the residential brokerage goes public later this year.

Since its launch in 2012, Compass has raised more than $1.5 billion from investors, who collectively hold a 60.25 percent stake in the startup, according to data from Pitchbook.

We took a deep dive into its cap table so you didn’t have to.

Seed | $8M | Share price and stake unknown
Urban Compass launched in 2012 with salaried rental agents. Backing came from Goldman Sachs, Founders Fund, Joshua Kushner’s Thrive Capital, American Express CEO Kenneth Chenault, .406 Ventures and others.

Series A | $20M | $10/share | 13.21%
Advance Publications (parent of Condé Nast) and Marc Benioff, founder and CEO of Salesforce invested in 2013. In early 2014, Compass pivoted to a traditional commission model.

Series B | $42M | $20.77/share | 4.37%
Advance, Benoiff, Chenault et al re-upped in 2014, letting Compass expand outside New York.

Series C | $50M | $40.50/share | 3.27%
IVP led the round in 2015 at a $810 million valuation. Developer Miki Naftali and LeFrak, with other prior backers, also chipped in to bulk up engineering.

Series D | $75M | $42.63/share | 6.1%
Wellington Management led the round, which crowned Compass a unicorn in 2016, fueling IPO rumors.

Series E | $550M | $65.88/share | 19.39%
In November 2017, Fidelity, IVP and Wellington wrote a check for $100 million. A month later came SoftBank’s mega-check for $450 million. With a $2.2 billion valuation, Compass began an acquisition spree.

Series F | $400M | $118.57/share | 8.12%
SoftBank doubled down in 2018, co-leading a round with Qatar Investment Authority at a $4.4 billion valuation. Compass honed in on a “2020 by 2020” goal of hitting 20 percent market share in 20 U.S. cities by 2020.

Series G | $370M | $154.27/share | 5.78%
Compass’ most recent round valued it at $6.4 billion in July 2019. The round, led by SoftBank and Dragoneer, was earmarked for geographic expansion plus R&D.

“They’re not yearning to see Times Square. What they are yearning to do is to see their friends and their family … Mass travel is going to be replaced by meaningful travel.”

— Airbnb’s Brian Chesky 

SPACs go hunting for proptech deals

It’s a good time to be a startup with IPO aspirations.

Investors plowed more than $83 billion into blank-check companies last year — and 15 days into 2021, they’ve invested $14.4 billion more. A growing number are targeting proptech deals, including Fifth Wall Ventures, Tishman Speyer, CBRE, SoftBank and others.

But raising money isn’t the hard part. Sponsors need to have an edge to convince investors to write checks, said Evan Ratner, a securities analyst at asset management firm Levin Easterly. “You’re not looking for the also-ran,” he said.

And with so many SPACs out there, it may become harder to find merger partners at a good price. “The seller is going to be able to say, ‘Hey, seven SPACs want to buy us, we’ll sell to the highest bidder,’” said Jay Ritter, a University of Florida finance professor who collects IPO data.

Something in the water?

The second week of January brought a flurry of C-suite news for proptech firms.

💦 After pivoting from homebuying to lending, Knock tapped Michelle DeBella, a former Lyft and Uber exec, as its new CFO. At both companies, she helped scale the finance teams ahead of their IPOs. Knock has raised more than $600 million in debt and equity since 2015.

💦 Vacation rental startup Vacasa, which has raised $634 million since 2009, hired Jamie Cohen from ANGI Homeservices to help lead the “next stage” of its growth. Cohen helped oversee ANGI’s 2017 IPO.

💦 On the heels of a $170 million round in June, hospitality startup Sonder beefed up its C-suite as it embarks on major growth in Canada. CFO Sanjay Banker will add “president” to his title. And Satyen Pandya will join as CFO from Flexport, a SoftBank-backed freight forwarding startup.

Well, that was fast

Three weeks after its IPO, Porch snapped up four startups for $122 million.

The Seattle company said it is buying Homeowners of America, an insurance company, for $100 million in cash and stock, and V12, a marketing platform for $22 million, plus two smaller firms for an undisclosed amount.

Before going public though a SPAC, Porch’s recurring losses put the company at risk of insolvency. Though its valuation soared to $1 billion after the IPO, Porch projected $53 million to $55 million in 2020 losses — up $20 million from earlier estimates.


STAT OF THE WEEK

$150B

Annual VC investment hit a record in 2020, per Pitchbook and NVCA


Landing gets $100M for flex living

Bill Smith sold his grocery-delivery startup Shipt to Target for $550 million in 2017.

His latest venture, Landing, a membership-based furnished apartment startup, just raised $100 million in debt and equity. The $45 million equity round was led by Foundry Group, with Greycroft and Maverson.

Founded in 2019, San Francisco-based Landing is a flexible, long-term solution for members, who can move between apartments as often as monthly. Members pay $199 to access furnished one- and two-bedroom apartments. Since March, Landing has expanded to 10,000 apartments in 75 cities.

Airbnb’s “insurrection” fallout

Airbnb straight-up cancelled all reservations in Washington, D.C., for the week of President-elect Joe Biden’s inauguration, the company said this week.

It won’t be cheap — Airbnb plans to refund all travelers and reimburse hosts — but the decision was made after local elected officials discouraged people from traveling to the U.S. capitol. Previously, Airbnb said it would block people tied to the insurrection at the Capitol on Jan. 6.

In addition to guidance from local officials, Airbnb cited new reports that armed militias and known hate groups would attempt to disrupt Biden’s inauguration.


Title insurance gets white-label treatment

Digital title startup Spruce has found a way for more people to avoid clunky pen-and-paper closings: The company said it’s launching a white-label product that brokerages, iBuyers and others can use for their own title businesses.

That will allow companies to operate digital title agencies without having to build or buy the technology, co-founder and CEO Patrick Burns told Business Insider. “Our mission is to turn every transaction into a one-click checkout,” said Burns. Spruce will collect a flat fee, corresponding to the client’s volume of transactions.

The New York City-based company has raised $50.1 million since 2016, including a $29 million in May. Scale Venture Partners led the round, with Zigg Capital and Bessemer Venture Partners.

During the pandemic, demand for digital services has surged. Spruce says it saw a 450 percent increase in transactions on its platform.

Small bytes

📣 Former Compass COO Maëlle Gavet was named CEO of startup accelerator Techstars.
💰 Neat, a mortgage lender, raised $22.5M.
💰 Own Up, a mortgage marketplace, raised a $12M round led by Brand Foundry Ventures.
🏠 La Haus, a Colombia-based real estate marketplace, closed a $35M round led by Greenspring Associates. NFX, co-founder by Trulia founder Pete Flint and Zillow co-founder Spencer Rascoff also invested.
💰 LEX, a real estate securities marketplace, raised $6M from investors including Brookfield chairman Ric Clark and others.
🛋 Outer, an outdoor furniture startup that sells directly to consumers, raised $10.5M.
🏠 On the heels of a $69M funding round, real estate tech and services startup Orchard is doubling its footprint by adding four new markets in the Southeast.
🎊 Piñata, a new app, wants to act as a loyalty program for property mangers by giving renters rewards for paying rent on time.

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