Compass Earns $1 Billion Valuation As New Unicorns Become Rarerby
New York-based real estate startup Compass Inc. raised new financing that values the company at more than $1 billion, according to a person familiar with the matter.
The $75 million round was led by mutual fund operator Wellington Management Co. and included venture capital firms Institutional Venture Partners and Thrive Capital, according to the company. It marks the creation of a new unicorn -- a startup valued at $1 billion or more -- as that becomes rarer.
During this quarter last year, 25 venture-backed unicorns were created. This year in the third quarter, Compass is the sixth, according to CB Insights, which tracks financing events for startups. It's an even more unusual phenomenon in New York, where ZocDoc Inc. was the last to become a unicorn a year ago.
Compass plans to use the money to expand into new locations and improve its technology for analyzing the real estate market. The company, which aims to make real estate transactions more transparent and convenient through an online service, has 24 offices across the U.S. and plans to open soon in San Francisco and other cities.
While other startups struggle to access new funding, Compass was able to raise money because its revenue is growing quickly, thanks in part to a strong U.S. housing market. Compass has passed $100 million in revenue so far this year, and plans to end the year with triple the revenue it generated in 2015, according to the person familiar with the matter. As people buy, sell and rent properties on the site, Compass takes a small percentage of the proceeds. About $7 billion in sales run through the site annually, the company said.
``The fundraising market right now is not great, but I think our performance has been very consistent,'' Ori Allon, Compass co-founder and executive chairman, said in an interview. ``We've been growing very quickly.''
The funding round brings the total raised by Compass to $210 million. Ashley Murphy, a spokeswoman, declined to comment on the valuation or the revenue.