Compass has tapped underwriters for a potential public offering that would be among the most buzzed-about IPOs in the residential world.
The SoftBank-backed firm, which jolted traditional brokerages when it launched eight years ago, has hired Morgan Stanley and Goldman Sachs as underwriters, Bloomberg reported. It is looking at a potential IPO sometime in 2021.
Founded in New York in 2012, Compass has raised more than $1.5 billion from investors including SoftBank, Fidelity, Wellington Management, Dragoneer and others. After raising $370 million in July 2019, Compass was valued at $6.4 billion — a figure that prompted rivals to question whether it was overvalued.
Compass bills itself as a real estate firm that uses technology to make agents more efficient. It currently has more than 18,000 agents who sold $91.2 billion worth of real estate last year, according to research firm Real Trends.
For years, Compass co-founders Robert Reffkin and Ori Allon said an IPO was likely, but claimed they were not in a rush to go public.
Like other residential firms, Compass has benefitted from a quicker-than-expected housing turnaround in recent months. Forced to lay off 15 percent of its staff in March, the firm claimed it saw record revenue in June, July and August.
Meanwhile, the IPO market has gotten hot with other real estate players lining up to go public, including Airbnb, Opendoor and Porch.com.
In recent months, Compass added independent board members including LinkedIn CFO Steve Sordello and Charles Phillips, a former president of Oracle.
[Bloomberg] — E.B. Solomont