Compass S-1 Deep Dive

Compass, a technology-enabled real estate brokerage, filed its S-1 in early March with plans to raise about $550 million as part of an initial public offering. The company updated its S-1 last week to include a share price range of $18-$19 (down from $23-$26 in the initial S-1), implying a post-money valuation of about $7.2 billion. Compass plans to trade on the New York Stock Exchange under the ticker “COMP” and the IPO is being underwritten by which is being underwritten by Goldman Sachs, Morgan Stanley and Barclays.

Founded in 2012 by Robert Reffkin and Ori Allon, Compass has rapidly grown to become one of the largest independent real estate brokerages in the country, with over 19,000 agents who facilitated more than $150 billion in total transaction value in 2020. The company has raised $1.6 billion since its founding; its last private round was a $500 million Series G completed in November 2019, which valued the company at a $6.5 billion post-money valuation.

In this post, I’ll dig into the Compass S-1, including the company’s financials, product strategy and valuation expectations as a public company. In particular, I’ll review some of the key themes highlighted by the Compass management team throughout the S-1: the central role of the agent in a real estate transaction, the company’s focus on top agent acquisition, and the role of technology as a key differentiator.