Compass is taking title.
Ahead of its much-anticipated IPO, the residential firm has inked a deal to buy KVS Title, a title insurance and settlement services firm in Washington, D.C., the company said Thursday. Terms of the deal were not disclosed.
The acquisition brings Compass closer to its goal of providing an “end-to-end” platform for real estate, and it could help drive profits for the VC-backed firm. In a statement, CEO Robert Reffkin said the KVS deal, as well as Compass’ integration of title services, would help agents “grow their businesses and better serve their clients.”
Founded in 2010, KVS Title has 90 employees across six offices in the Washington, D.C. metro area. Its attorneys have completed 70,000 settlements, and it serves clients in California, Florida, Washington state, Maryland, Virginia and Washington, D.C., according to its website.
Compass is the third-largest brokerage based on sales volume, having sold $91.3 billion worth of real estate in 2019, according to data firm Real Trends. It currently has 18,000 agents nationwide.
In January, Compass filed confidential plans to go public. It was last valued at $6.4 billion, after a July 2019 funding round.
Thanks to the U.S. housing market’s hot year, Compass reported record revenue from June to October 2020, according to news reports, but it’s not yet profitable on a companywide basis.
Many big brokerages offer mortgage, title and escrow as an ancillary service that helps drive additional revenue to the company.
Realogy Title Group, for example, generated $226 million of the real estate giant’s $726 million in operating EBITDA in 2020, according to the company’s financials. Warren Buffett’s HomeServices of America has a title and escrow network. Keller Williams has an affiliated company, Keller Mortgage.
In recent months, Compass has been on a buying spree: Earlier this month, it scooped up Bold New York, a 120-agent firm that focuses on new development leasing. In January, it acquired Lila Delman Real Estate, a Newport, Rhode Island-based firm focused on the luxury market.
Outside of those brokerage acquisitions, Compass struck a deal in October to buy Modus, a Seattle-based title and escrow software startup that previously raised $12.5 million. And before that, it acquired Contactually, a popular customer relationship manager, as well as the team behind Delectica, an artificial and machine learning company.