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Compass CEO Plans to Double Down on Tech Investment

Tech-enabled real estate company Compass closed its first day of trading at $20.15, about 12 percent above its IPO price. The real estate company priced its shares at $18 apiece, the low end of its target range.  raised about $450 million through its IPO and began trading at $21.25, around 22 percent above its IPO price. It initially set a price range of between $23 and $26 before lowering the range on Wednesday to between $18 and $19.

CEO Robert Reffkin said that he was pleased with the stock performance on the company’s first day of trading. He also said the IPO accomplished what Compass needs to enter its next stage of growth. He also added that the goal wasn’t a price or a valuation by it was making a certain amount of capital to fund the business.

The company is often perceived as a tech company, it operates more or less like a traditional real estate brokerage. It offers its real estate agents a suite of digital tools to better market themselves and their listings. Agents can use Compass customer relationship management platform and tools to make digital videos, ads, and newsletters. The inspiration for came from Reffkin’s mother, who was a real estate agent for most of Reffkin’s life. She’s now an agent with Compass.

Compass IPO comes after a busy year for the residential real estate market. The company has added about 5,000 agents to its platform in the past backed by investors including the SoftBank Vision Fund and IVP. During 2020, agents represented buyers or sellers of 275,000 homes worth more than $300 billion, the company said in its S-1. Its revenue during the year grew 56% compared to 2019 to $3.7 billion.

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