Real Estate Brokerage Compass Reveals $270M Loss Despite Rising Revenue

Compass, the residential brokerage firm backed by SoftBank, on Monday publicly filed securities documents for its IPO that revealed rising revenues paired with smaller losses for the New York-based startup.

Compass said its revenue for the year ended Dec. 31, 2020, was $3.72 billion, up 56 percent from the year prior. At the same time, its losses fell from $388 million a year earlier to $270.2 million in 2020. 

The company plans to list on the New York Stock Exchange under the ticker symbol COMP. It listed the size of the offering at $500 million, though that’s a placeholder amount that will likely change.

Compass’ most recent private valuation was $6.4 billion, according to Crunchbase data. The company has raised about $1.52 billion in funding from investors including the SoftBank Vision Fund and IVP. Its most recent funding was a $370 million Series G in July 2019. 

So far in 2021, venture-backed startups in the real estate and real estate investment space have raised at least $962 million in funding globally, according to preliminary Crunchbase data. The sectors have raised more than $8.7 billion in funding globally since March 2020.

That funding boom coincides with a surge in U.S. homebuying that pushed existing home sales to a 14-year high in 2020, according to the National Association of Realtors. 

Other companies in the space that have recently raised significant sums of venture funding include Divvy Homes, which operates a rent-to-own homebuying business and last month raised a $110 million Series C investment led by Tiger Global Management. Another company in the space, Opendoor, went public in December via a merger with a special purpose acquisition company. 

Compass confidentially filed plans to go public in January. The underwriters for the offering are Goldman Sachs, Morgan Stanley and Barclays.

— Sophia Kunthara contributed. This story was updated to clarify that the listed size for the offering is a placeholder that’s likely to change.

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