• Sun. Apr 11th, 2021

Compass Files Confidentially for IPO

Robert Reffkin (Getty, iStock)

Compass has filed confidentially to go public.

The residential brokerage, which has raised $1.5 billion from investors including SoftBank, said it submitted a draft registration statement with the U.S. Securities and Exchange Commission on Monday.

Compass did not disclose the size of the offering. The firm’s last valuation was $6.4 billion in July 2019, when it raised a $370 million Series G.

The impending IPO has been the subject of intense speculation in the real estate world.

Over the past year, Compass been laying the groundwork for a public offering by rounding out its C-suite and building up an independent board. The firm reportedly hired bookrunners last year.

Founded by Robert Reffkin and Ori Allon on New York in 2012, Compass burst onto the scene by hiring top agents across the country and gobbling up market share. Even as rivals criticized aggressive recruiting tactics, Compass grew to more than 18,000 agents.

In 2019, it ranked as the No. 3 residential firm in the country with $91.3 billion in sales, according to Real Trends.

Like other real estate firms, Compass was forced to make cuts when Covid hit, and in March it laid off 15 percent of staff. But as the housing market bounced back, Compass reported record revenue in June, July and August.

In an email to agents last month, CEO Robert Reffkin addressed the rumored IPO. “Being public will allow Compass to raise capital that we can invest in more tools and more support to help you,” he wrote.

Earlier this month, Compass was sued by a former agent in California who accused the firm of using “bait-and-switch” tactics to lure him and other agents from competitors. In 2019, real estate giant Realogy accused Compass of “predatory” poaching and unfair business practices. That suit is ongoing.