Compass Real Estate is an American technology company that is changing the real estate industry. It offers innovative solutions to make the jobs of agents easier. In addition, it provides better services for the consumers who select agencies that use their software. In case you haven't heard of them yet, here are ten interesting facts about Compass Real Estate that you probably didn't know but might find useful.
1. They were founded under a different name
As with many large companies, Compass wasn't initially known by the business name that it has right now. It started out as Urban Compass. The new company was first launched in 2012 so it hasn't been around for that long, but it the time that it's been in operation, it has grown by leaps and bounds.
2. The name of the company is misleading
When people first hear the name Compass Real Estate, they assume that it is a real estate brokerage firm, but that isn't what they're all about. While they do deal in rental properties and have agents onboard, there is so much more that Compass does. The name is a bit misleading because it doesn't refer to the tech end of the operation. They are a tech company that produces software for real estate firms and agents. The software streamlines many of the functions that would take up a lot of time for agents in busy work. It saves time, and ultimately money for the agents by reducing their workload.
3. Goldman Sachs invested in Compass Real Estate
When Compass was first getting started, they needed large sums of venture capital to produce their software products and set up the infrastructure of the company. There were several large investors who believed that the venture had good odds of achieving success. Among them was Goldman Sachs. Together with a few other big players in the financial investment game including Thrive Capital, Founder's Fund and many individual investors, the initial round of seed fundraising brought in $8 million in startup funding which gave Compass a healthy start.
4. Compass earned distinction for innovation
One of the things that Compass has done to earn a place of distinction within its industry is to become to first to provide a certain type of software. They developed a proprietary mobile apps to assist real estate agents in doing their jobs. It always gives a company the edge in business to be the first to provide products which are useful and it helps in building the reputation of the brand, allowing them to more easily take leadership in their niche.
5. They make revenue though a commission cut
Compass, as Urban Compass was involved in the real estate industry by working with contracted agents and taking a cut of the commission for their services. They started out as a tech company. When they made the decision to build software for realtors, they changed their entire business model. This major event happened in 2014. They earned their revenues by establishing contracts with independent real estate agents and then taking a portion of the commissions that their partners earned.
6. Compass expanded quickly
The New York City based tech company maintains its headquarters there. Since their 2012 launch, they have expanded into 19 markets within the United States. They not only serve New York, but also Newport Beach, Santa Barbara, The Hamptons, Dallas, South Florida, Los Angeles, Aspen, San Francisco, Chicago, and Washington DC.
7. Compass focused on rentals in the early stages
One of the first ventures that Compass was involved in was the rental industry in New York City. If you are familiar with the way that the rentals system worked just a decade ago, then you'll realize that it was badly in need of improvements. It was difficult to rent a place in the city without going through pages of advertisements that misrepresented the available properties. For some, finding a home or apartment turned into a nightmare of wasted time.
8. Compass was awarded millions more in funding in 2014
About the time that Compass changed its business model they attracted yet more investment interest. A round of Series B funding brought in another $40 million bringing the company to a valuation estimate of $360 million. They were off to a good start and they leased a a large space for their headquarters.
9. The Mayor of New York helped them celebrate their launch
Here is a fun fact about Compass Real Estate. When the company went public in May of 2013, a celebration was slated. The Mayor for the City of New York at the time was Michael Bloomberg and he was on board to help them celebrate the event.
10. Compass Real Estate has surpassed the billion dollar mark
The last valuation of Compass Real Estate has placed them several times over the billion dollar mark. The latest figures place the company at a value of $4.4 billion. After several more rounds of funding and hundreds of millions of investment dollars and aggressive expansion into yet more major cities, they have become a leader in the real estate industry, particularly in the tech end.
Written by Garrett Parker
Read more posts by Garrett Parker