Compass, the US-based real estate software provider backed by telecommunications and internet conglomerate SoftBank and media group Advance Publications, has gone public in a $450m initial public offering.
The offering consisted of 25 million shares priced at $18.00 each, at the foot of an $18 to $19 range cut from $23 to $26 at the same time the size of the offering was reduced from 36 million shares.
The company floated on the New York Stock Exchange late last week and its shares closed at $18.59 yesterday, giving it a market capitalisation of roughly $7.2bn.
Investors including SoftBank’s Vision Fund and hedge fund manager Discovery Capital Management had expressed interest in buying $140m int the offering but have not revealed whether they did so.
Founded in 2012, Compass has built an online platform that provides extensive listings of homes for sales. Its technology helps its brokers provide a more efficient service for both buyers and sellers, and it made a $270m net loss in 2020 from $3.72bn in revenue.
Vision Fund provided $250m of a series G round that closed at $344m in January 2020, according to the IPO prospectus, taking the company’s total funding to about $1.5bn and valuing it at a reported $6.4bn. It included Canada Pension Plan Investment Board and Dragoneer Investment Group.
Vision Fund and Qatar Investment Authority co-led the company’s $400m series F round in 2018, that also featured financial services and investment group Fidelity, Discovery Capital Management, Wellington Management and IVP, valuing it at $4.4bn post-money.
SoftBank agreed to invest $450m in the company at a $2.2bn valuation the previous year, following earlier funding from backers including Advance Publications, Fidelity, Thrive Capital, Founders Fund, .406 Ventures, IVP, Wellington Management, Marc Benioff and Kenneth Chenault.
Compass founder, chairman and CEO Robert Reffkin owns all of its 15.2 million class C shares and about 2.5% of its 435 million class A shares. Vision Fund holds 35.3% of its class A shares post-IPO, down from 36.7%, while Discovery Capital Management owns 9.6%.
Goldman Sachs, Morgan Stanley and Barclays Capital are lead bookrunning managers for the offering while Deutsche Bank Securities and UBS Investment Bank are bookrunning managers.
Oppenheimer, Needham & Company, Zelman Partners, Loop Capital Markets, Academy Securities, Blaylock Van, Samuel A. Ramirez and Siebert Williams Shank are co-managers. The underwriters have up to 30 days to buy up to 3.75 million extra shares, potentially boosting the IPO to about $518m.
