The well-funded real estate brokerage announced Tuesday it’s planning an August launch for “a completely redesigned consumer search and app experience.”
Compass has closed a $370 million Series G funding round, its seventh since 2013, propelling the company to a new valuation of $6.4 billion, the real estate brokerage announced Tuesday.
Fueled in part by the Softbank Vision Fund, a longtime patron, the new fund was also financed by the Canada Pension Plan Investment Board, Dragoneer Investment Group and Qatar Investment Authority. The money will allow the brokerage to invest more deeply in platform development and upcoming plans for an August launch of a redesigned consumer search and app experience.
“It has been incredible to see the growth of our product and engineering team, including the addition of Joseph Sirosh as CTO,” Compass Executive Chairman Ori Allon said, referring to the former Microsoft executive, who was hired in December as chief technology officer. “We are excited to partner with new investors, and deepen our relationship with our existing partners to accelerate our growth and further our technology advancements.”
Building an “end-to-end” software platform has long been Compass CEO Robert Reffkin’s stated goal, with a focus on allowing agents to narrow in on their business by streamlining the buying and selling process. Since Sirosh joined the company, Compass has opened a new tech hub in Seattle and grown its product and engineering team to more than 300 employees.
In a statement, the company said the new round will position Compass to make further investments in software development, including support for the launch of the redesigned consumer search and app experience. The investment positions Compass to better compete with Keller Williams and RE/MAX, both of which revealed details on new consumer-facing platforms earlier this year.
The company has also touted its Compass Concierge platform, a staging and renovation service that comes at no upfront cost to homesellers.
“This news comes on the heels of incredible momentum in building our platform, and on the verge of launching our revamped search experience, which will help more people find their place in the world,” Sirosh said in a statement. “We are accelerating our investments in cloud, mobile and AI to create a revolutionary platform to simplify home selling, buying and ownership.”
Compass has raised a total of $1.5 billion so far, led by three recent major funding rounds. In December 2017, Compass raised $450 million, and in September 2018 it raised another $400 million. The SoftBank Vision fund was a major player in both of those investment rounds.
The latest funds are coming from the inaugural Vision Fund of the Japanese conglomerate, not the recently announced $108 billion second Vision Fund.
Reffkin has previously addressed the controversy surrounding SoftBank’s financing by Saudi Arabia’s sovereign wealth fund, in the wake of the death of Saudi journalist Jamal Khashoggi. Reffkin has never explicitly vowed not to take money from the SoftBank Vision Fund.
“I think there’s nothing about that that is okay, from a human level and from a business level,” Reffkin said, at Inman Connect in January, repeating similar statements he made in October. “There’s nothing about that that I support. It makes me consider what I want to do in the future.”
The SoftBank Vision fund was criticized by many, including in the media, for its ties to Saudia Arabia at a time when others were distancing themselves from the nation, in the wake of the killing of Khashoggi.
During Compass’ $400 million Series F funding round, a source close to SoftBank told Inman that the company is now a meaningful shareholder in Compass.
The Qatar Investment Authority, a state-owned holding company — that acts as a national wealth fund — with the goal of investing in foreign assets to bolster the Persian Gulf country’s economy, was also one of the leaders of Compass’ last funding round.
Dragoneer Investment Group, a San Francisco-based private investor has a track record of investing in later funding rounds. The company was part of Slack’s series H funding, DoorDash’s Series F and Series G funding rounds and also invested in the tech-focused, now publicly-traded Redfin.