Compass Is the Next Unicorn IPO to Watch

By Chris Lange Published Mar 23, 10:41AM EDT

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Compass Is the Next Unicorn IPO to Watch — © Courtesy of ITC Entertainment

Compass has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering. The company intends to price its 36.0 million shares in the range of $23 to $26, with an overallotment option for an additional 5.4 million shares. At the maximum price, the entire offering is valued up to $1.08 billion. The company intends to list its shares on the New York Stock Exchange under the symbol COMP.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, Barclays, Deutsche Bank, UBS Investment Bank, Oppenheimer, Needham, Zelman Partners, Loop Capital, Academy Securities, Blaylock Van, Ramirez and Siebert Williams Shank.

Compass provides an end-to-end platform that allows residential real estate agents to deliver exceptional service to seller and buyer clients. The platform includes an integrated suite of cloud-based software for customer relationship management, marketing, client service and other critical functionality, all custom-built for the real estate industry and enabling its core brokerage services.

Through 2020, agents on the Compass platform have represented either sellers or buyers of more than 275,000 homes worth more than $300 billion. With 4% of the U.S. market, Compass is the largest independent real estate brokerage by gross transaction value.

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Here are a few other highlights from the filing:

Our agents close an average of 19% more transactions measured from their first year compared to their second year at Compass;

Our agents sold homes in 21% fewer days, on average, relative to agents at firms with comparable average home sale values in our MLS Cities;

On average, 88% of our agent teams used our proprietary technology platform at least once per week, of which approximately two-thirds used it daily;

Our principal agent retention rate exceeded 90%

In 2019 and 2020, revenue was $2.4 billion and $3.7 billion, respectively, representing a year-over-year increase of 56%. Net losses were $388.0 million and $270.2 million in 2019 and 2020, respectively.

The company intends to use the net proceeds from this offering for working capital and general corporate purposes.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.