CRE data crowdsourcer CompStak raises $50M
Morgan Stanley arm leads Series C, with participation from Mitsui Fudosan and Crow Holdings
CompStak, which pioneered a crowdsourced approach to commercial real estate data as part of the first wave of startups in what is now known as “proptech,” has raised $50 million in a new fundraising round, the firm told The Real Deal.
Morgan Stanley Expansion Capital, the investment giant’s late-stage venture arm, led the Series C round, with participation from Mitsui Fudosan and Crow Holdings, which invests the fortune of the late real estate development giant Trammell Crow. Prominent real estate figures such as Convene founder Ryan Simonetti and former Savills CEO Mitchell Steir also invested.
CompStak last raised about $14 million in a Series B round in 2019, and sold a minority stake to Moody’s in 2017. The firm plans to use the new funds to scale its product and marketing teams and roll out a number of new products, said CEO Michael Mandel.
“The vision is to be the leader in commercial real estate data,” said Mandel, who co-founded the firm in 2011 with CTO Vadim Belobrovka. “Do it through crowdsourcing and do it through partnership with the industry.”
The 800-pound gorilla in that particular room, of course, is CoStar Group, which has a market cap of about $33 billion and reported revenues of nearly $500 million last quarter; CoStar and CompStak have had legal skirmishes before.
Even though CompStak is best known for its crowdsourced office-leasing and investment-sales comps, in which brokers share information about new deals in exchange for access to others, the company’s share of revenue from office landlords is only about 15 percent, Mandel said. Much of its business comes from private-equity firms, hedge funds, sovereign-wealth funds, consulting firms and corporate occupiers, including Google.
The firm “somewhat insulated ourselves” from the pandemic’s assault on the office market, Mandel said, by focusing on fast-growing areas of commercial real estate such as industrial, which has seen record-breaking activity over the last 18 months.
Commercial real estate lending has also “come back roaring,” Mandel said, and “we’ve been able to double down on third-party lenders.”
Mandel declined to disclose CompStak’s new valuation, and would not provide specifics on revenue except to say it was in the “tens of millions.”. Asked if the company was profitable, he said, “we’re not, but we could be,” echoing comments by other proptech founders about emphasizing growth at a time of tremendous investor interest in the sector. VTS’ Nick Romito, another early entrepreneur in the proptech space, recently told TRD that “the markets are not valuing” profitability.
CompStak, which has about 100 employees, is headquartered at Hartz Mountain’s 36 Cooper Square, a building with a serious Silicon Alley pedigree. It also has offices in Los Angeles, Chicago, and Belgrade, Serbia.
Mandel, a former office leasing broker, indicated that he’d be looking to grow the firm’s headcount and office footprint.
“We’re one of those rare companies,” he said, “that are back in the office and need more space.”