Compass valued at $6.4 billion in latest fundraising round

SoftBank Vision Fund has invested in the company three times now — including $450 million at the end of 2017 that was touted as the largest real estate tech investment in US history.

Compass has more than 300 offices in the US, and has been hit with multiple lawsuits from competitors over broker recruiting practices.

Real estate brokerage Compass is now valued at $6.4 billion after a fresh round of funding from SoftBank's Vision Fund, Redfin and Airbnb-backer Dragoneer Investment Group, and others.

Seven-year-old Compass is part of a wave of startups that have been adding a technology twist to traditional real estate businesses — and these companies have attracted a surge of interest from venture-capital investors.

Compass combines a real estate listing service, similar to publicly-traded Zillow, with a more traditional brokerage, employing agents who actually buy and sell houses. The company announced its $370 million Series G round on Tuesday, and said its overall fundraising now totaled $1.5 billion.

This round includes new investors like the Canada Pension Plan Investment Board (CPPIB) and Dragoneer Investment Group, and returning investors such as SoftBank's Vision Fund.

SoftBank has invested in the company three times now, including a $450 million dollar investment at the end of 2017 that was touted as the largest real estate technology investment in US history. SoftBank lead the next round of investment in 2018 with the help of the Qatar Investment Authority, bringing Compass to a $4.4 billion valuation with an additional $400 million raised.

The company lists available properties to buy or rent on its website, and some of the listings are exclusive to Compass. But it also has real estate agents that work directly to sell those listings.

Compass has largely focused on residential real estate, but is now building a commercial team.

Compass now has more than 300 offices nationwide. This growth stemmed from acquisitions of smaller brokerages and promises of high pay and benefits for brokers who join Compass, the Wall Street Journal reported. Compass has had to grapple with multiple lawsuits over broker recruiting practices from competitors like Zillow and Realogy.

The latest fundraise comes as Compass has spent heavily on technology to differentiate itself from traditional brokerages. It offers multiple services for agents and sellers, including software that purports to cut down on paperwork for agents, and no-interest loans to pay for painting and staging a home.

“We are accelerating our investments in cloud, mobile and AI to create a revolutionary platform to simplify home selling, buying and ownership,” Joseph Sirosh, CTO, said in a statement. Sirosh was hired last year from Microsoft, where he was CTO of AI. Compass recently opened a product and engineering-focused office in Seattle where it has more than 300 workers.

SoftBank, the world's largest tech investor, recently announced a second Vision Fund. Investors include Microsoft and Apple, though it has not yet secured funding from Saudi Arabia. Critics focused on SoftBank's relationship with Saudi Arabia last year after the death of journalist Jamal Khashoggi in Saudi custody.

Compass's 2012 seed funding round included Goldman Sachs, Peter Thiel's Founder's fund, and the then-CEO's of ZocDoc and American Express.