Robert Reffkin told The Real Deal that Compass doesn’t plan to go public in the next 18 months, and a Compass spokesperson said WeWork’s failed IPO won’t impact the company’s plans.

The ever-growing, well-funded, New York City-founded real estate brokerage Compass has no plans to go public in the next 18 months, CEO Robert Reffkin told The Real Deal this week in an exclusive interview.

“We have enough capital where we don’t need to go public,” Reffkin told The Real Deal.

Reffkin, in the interview, also declined to disclose how much capital the company has. A spokesperson for Compass declined to elaborate, saying there isn’t any more to tell regarding the initial public offering (IPO), other than what’s been reported.

WeWork’s failed IPO doesn’t have any bearing on Compass’ plans, a spokesperson for the company told Inman.

In September, Reffkin said in an interview with CNBC that “an IPO is likely in our future.” However, Reffkin did not say when Compass might make an initial public offering on the stock market, adding, “I don’t go to sleep at night thinking about an IPO.”

Nevertheless, WeWork’s failed IPO and the significant losses the company reported in the wake of the initial plans to go public has put Compass under scrutiny. Both companies are heavily SoftBank-backed and have raised a ton of money toward an inevitable IPO.

And while WeWork saw the departure of its CEO Adam Neumann from he top post — though Neumann still has a seat on the board of directors — Compass itself has seen some high-profile departures, including most recently Maëlle Gavet, its chief operating officer, as well as Eytan Seidman, former head of product, and Khurrum Malik, former chief marketing officer.

After the departures of two executives in June, Compass’ shuffled its c-suite, moving Gavet off the tech development and reorganizing it under Reffkin and the company’s chief technology officer Joseph Sirosh.

In a memo sent earlier this month, Compass’ CFO Kristen Ankerbrandt attempted to put distance between Compass and WeWork.

Ankerbrandt cited Compass’ lack of debt and the different business models. She even cited the fact that Compass’ executives fly coach and aren’t taking private jets as an example of the company being more cost-conscious. Reffkin, playing his part, even posted an Instagram photo of himself in what appears to be coach, two days ago.


View this post on Instagram


NYC -> SF about to take off. If anyone wants tips on how to fall asleep on a redeye, I’m happy to give you some great tips!

A post shared by Robert Reffkin (@robreffkin) on

On Twitter, commentators pointed out that Compass’ other co-founder and executive chairman Ori Allon posted a photo of himself flying in a private jet in April, but it doesn’t appear to be business travel and rather a personal trip to the Bahamas.

Read Ankerbrandt’s memo, obtained by Inman and first reported by Bloomberg, in full below.

Compass Family,

Over the past few weeks we have seen comparisons being drawn between Compass and WeWork simply because we share a single investor. To be clear, our businesses are quite different — in terms of our business model, capital structure, customers, culture and investments. I hope the 8 facts below help make this contrast crystal clear and answer the questions that some people outside of Compass have raised.

  • Compass has no debt: Compass has raised zero dollars of debt while WeWork has over $5B of debt obligations that they have to pay back. Every dollar we have raised is in equity. With debt, companies have to pay back lenders with company money. With equity, companies don’t pay investors, but rather the investors aim to realize their returns in the public market.
  • Compass’ valuation is in line with peers & leaves room for future equity growth: Compass’ last round (Series G) valued the company at $6.4bn, which implies a revenue multiple in line with those of other publicly-traded real estate tech companies at 2-3x 2019E revenue, a fraction of WeWork’s multiple reported by the financial press (20x).
  • Compass has a diverse and sophisticated investor base who collectively set the valuation for each round: Every one of our fundraising rounds has included multiple well-respected investors who have endorsed the valuation. Some of our investors include Wellington, IVP, QIA, Softbank, Fidelity, Dragoneer and others. WeWork’s recent rounds were exclusively with one investor.
  • Compass’ expansion strategy is focused on depth vs. breadth: We have executed a consistent strategy throughout 2019 to drive deeper into our top 20 markets in the U.S. with a focus on profitable growth versus opening hundreds of locations across 29 countries as WeWork did. We intend to be a global company but our near term focus is one of the reasons we feel great about our path to profitability.
  • Compass has a growing % of its employees focused on tech: We have over 425 members of our tech team who make up 19% of our total employee base (not 5%, as some outlets have erroneously reported), creating proprietary technology in partnership with our agents that they use to run their business and that differentiates us in the market.
  • Compass’ acquisition strategy has been focused on assets that strengthen the core business: Every business Compass has acquired has either efficiently grown our agent base or accelerated our technology roadmap (e.g., Contactually), which is very different than investing capital to acquire companies that are not relevant to the core business.
  • Compass has a culture of frugality: Our leadership team books coach tickets and does not fly on private jets and, as you know all too well, I review all company expenses above $1,000. This culture is critical to ensure we responsibly invest our money into building a better future for agents and their clients.
  • Compass’ industry and business model are completely different: It may seem obvious, but it’s worth stating that it is hard to draw any parallels between our businesses given that we have different customers (agents, not enterprises), are in different industries (residential real estate vs. commercial leasing), and have very different business models (an end-to-end tech platform on which to operate vs. an office space solution).

Lastly, you may have heard some concerns about tech IPOs underperforming in recent months, so I’m adding a simple chart at the end of this email put together by a major investment bank to provide additional perspective. It shows the last private market valuation compared to the current public market valuation for tech companies that have gone public since 2018. What you see, with few exceptions, is significant value created for the employees and investors (median increase of 68% in 2019 increasing to 85% when you include 2018). While the headlines might indicate these companies are performing poorly, the numbers show a sizable increase from their last private valuation to current trading levels.

I hope this helps provide you all some clarity and talking points for your clients and colleagues. I am amazed by the Compass team and incredibly proud of what we have all accomplished so far this year. I’ve spent 17 years in tech investing, working both at Carlyle and Goldman Sachs, and I couldn’t be more excited about the future at Compass. Thank you for your continued hard work and your commitment to our mission. We are grateful to you and your dedication to our customers. Stay focused and let’s make the flywheel spin!

All the best,


Update: Story updated to clarify the roles of the two executives who departed from the company in June and with additional clarification that WeWork’s filed IPO won’t have any bearing on Compass’ future plans.

Email Patrick Kearns

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