Residential Brokerage Compass' "Technology Promise"
The Vision Fund's $370 million investment in Compass valued the residential brokerage firm at $6.4 billion in the summer of 2019. This valuation is supported by a "technology promise" that the company can make its agents more effective and productive.
Realogy, with 300,000 agents to Compass' 15,000 agents and $505 billion of transaction volume to Compass' $88 billion, has a market value of $384 million.
It would seem this technology would need to bridge a massive gap. Skeptics are raising eyebrows. The article cites Susquehanna analyst Jack Micenko:
"They are a residential real estate brokerage, just like everybody else. They make their money the same way Realogy does and Re/Max does."
Compass' S-1 filing cites an increasingly familiar combination: a disruptive and global technology platform coupled with massive losses.
Source: Ben Walsh | “Start-up Compass Promised to Revolutionize the Real Estate Business. It Hasn’t Happened.” | Barron's | 4/18/2020 | Visit