Urban Compass launches sales unit
Ori Allon’s young startup, Urban Compass, has found early traction helping New Yorkers rent apartments. Soon, Urban Compass will help them buy apartments too.
Urban Compass will also be launching Urban Compass Network, a city guide to help people adjust after a move, in the next few months. Urban Compass launched three months ago to solve a big headache for urbanites: finding an apartment. It’s a cleaner experience than Craigslist and the startup prides itself on timely, accurate listings (see screenshot below). Addresses are shown on a Google-like map as well as pictures of the rentals.
If you want to see an apartment, you can schedule a viewing on Urban Compass which will put together an itinerary for you (think of Urban Compass like ZocDoc – a real-time doctor appointment tool – for house hunting). Urban Compass acts as a broker, taking 7.5% per completed deal. That’s about half the amount a typical broker charges.
Revenue has been scaling quickly; it has more than doubled month over month. Urban Compass has already generated more money than most startups make in their first year or two.
Investors have latched on to Urban Compass, partly because of its clear business model but also because of Allon’s entrepreneurial track record.
Allon raised $8 million before he launched Urban Compass, and the round was over-subscribed. In other words, investors wanted to give him more than $8 million. Last week he announced another $20 million fundraise at a $150 million valuation. Demand didn’t stop there. He’s since taken an additional $5 million at the same terms.
Prior to launching Urban Compass, the serial entrepreneur sold startups to Google and Twitter. Twitter won a bidding war with two other major tech companies for Julpan, a technology that eventually became the company’s “discover” feature. Prior to Julpan, Allon sold a search-related company to Google, Orion.
So perhaps investors like Allon because he keeps making money for them. As Allon says, a reputation is all an entrepreneur has.
Still, $33 million is a lot for a 3-month-old startup to raise, especially one that’s already making its own money. But Allon thinks it’s the best way to grow and meet consumer demand.
He’ll use some of the cash to double Urban Compass’ staff from 100 people to 200 within one year. Cash will also be spent launching home sales and Urban Compass Network over the next few months. Once all of that has been accomplished, Urban Compass will launch in a second city. Allon says he gets weekly requests to launch in San Francisco.
“We want to build a real business,” says Allon. “People mention other companies that raised a lot of money and failed. We didn’t raise $33 million to do another photo app. We’re actually solving a real problem, and we need to build a business which is human heavy.”