Although sites like Zillow and Trulia generally steal the online real estate limelight, there's a whole bunch of startups out there aiming to carve out a niche of their own. One of those is New York-based Compass, which has just raised $50 million to build out a platform that utilizes Big Data and algorithms to help sellers price their homes and work out how to sell them for the best possible price.
Compass was actually founded in 2012, by entrepreneur Ori Allon and ex-banker Robert Reffkin. The pair had the idea of creating an easier way to find and rent apartments in New York by building hyperlocal information networks that could help match residents to certain locations in the city, TechCrunch reports. The platform draws on many different sources of data and then crunches them to provide supercharged information both to help price homes and also to help surface properties that fit clients' needs.
Compass has long since expanded beyond its original scope, and is now valued at a healthy $800 million, having seen revenues grow ten-fold in the last 12 months. The platform now hosts over a $1 billion worth of listings, and with the new funding is ready to start expanding into other U.S. cities, starting with Boston, then Chicago, Los Angeles and Seattle.
To fuel its growth, Compass has made a few acquisitions along the way. Last November it purchased a Washington D.C.-based startup and promptly used that company as a spearhead to push into the local market there – rolling out its software to drive that business. Compass' Allon told TechCrunch he's planning more acquisitions along these lines.
“After we went to DC, by March we tripled our revenues after implementing our tools and technology,” he told TechCrunch. “That showed us that this is not just about New York City. This tech is scalable and works everywhere.”
Since starting up in 2012, Compass has evolved to focus primarily on sales instead of rentals, in part because the information its networks provide are far more useful to real estate agents than residents. Allon says its agents who need the information most to do the selling, and the company's goal is to now “make agents smarter”.
The latest funding round was led by Institutional Venture Partners, and brings the total amount raised by Compass to $123 million.
“Compass has developed exceptional technology to improve the real estate experience and is led by a talented management team, whose vision and commitment to innovation has quickly established the company as a leader in the market,” Todd Chaffee, General Partner at IVP, said in a statement. “We are excited about their long-term strategy and are proud to partner with Compass as it continues its rapid expansion.”