Real estate brokerage Compass files for IPO amid pandemic boom in housing prices
Compass, a real estate brokerage firm with an increase of than 19,000 agents in the united states, filed to move public on Monday, and told potential investors that earnings jumped 56% last year seeing as housing prices soared.
Founded in 2012, the New York-based company offers sought to get advanced technology to realtors, providing them with better data, marketing tools and customer romance software than they can get from a typical brick-and-mortar brokerage.
Compass is one of the many tech-powered property companies to reap the benefits of a flood of capital raising funds that’s enabled emerging businesses to grow fast even while burning cash. Revenue climbed to $3.7 billion this past year from $2.4 billion in 2019, however the company spent 82% of its revenue on commissions and “other transaction-related expense.”
Net loss for the entire year narrowed to $270.2 million from $388 million in 2019 and its cash and equivalents shrank by 20% to $440.1 million.
Compass was last valued at about $6.4 billion in a 2019 financing round led by SoftBank’s Vision Fund, which also committed to office-local rental company WeWork, home-flipping internet site OpenDoor and construction-technology company Katerra. OpenDoor gone public late this past year through a reverse merger and is now worth over $17 billion, while WeWork continues to be hoping to bounce again from a near collapse in 2019. SoftBank owns 35% of Compass’s Class A shares.
Residential real estate is a booming market over the past year, motivated by Covid-19 and the lockdowns that forced persons to home based. With the realization that remote control work is here now to stay, property owners have looked to go to extra desirable locations, but innovative supply possesses been limited, triggering prices to jump.
Home prices nationally increased 10.4% in December, compared with a year earlier, based on the S&P CoreLogic Case-Shiller Home Price Indices. That’s the strongest twelve-monthly growth rate in over six years and among the largest annual benefits in the more than 30-year record of the index.
Like many property businesses, Compass faced challenges at the start of the pandemic due to stay-at-house orders and uncertainty around the market. The company trim 15% of its staff in March 2020.
However, business rebounded dramatically in the second half of the entire year and “total transactions increased to 144,784, a 66% increase from 2019, notwithstanding the result of the COVID-19 pandemic,” Compass said in the filing.
Source: https://www.cnbc.com