Tuesday, May 30, 2023

Compass, which runs an online marketplace for buying, selling, and renting real estate, closes up ~12% in its trading debut, after raising $450M in an IPO: Compass 450m Ipowilhelmtechcrunch

Compass 450m Ipowilhelmtechcrunch: Compass, which runs an online marketplace for buying, selling and renting real estate, closed up ~12% in its trading debut after raising $450M in an IPO.

The company’s first day of trading saw shares rise from the offer price of $19 to a high of $25.40 before tapering off significantly through late morning.

The company offered 22.5M shares on Wednesday at the offering price to hit a valuation of about $1.3B.

The stock closed at $25.40, up 16% at the end of trading on Thursday and well above the IPO price of $17. The listing priced at $18 which was the midpoint of the expected range of $15-$20 a share.

$1.3B Valuation

The company is offering 15M shares to the public and selling another 7.5M shares to existing stockholders including New York-based real estate investment company Tishman Speyer and Blackstone Group ( BX ).

Private-equity investors Blackstone Group and Tishman Speyer are selling the most shares in Compass’ IPO. Besides the $450 million proceeds that are expected from the offering, Compass will get about $657 million from its sale of secondary shares to other private-equity firms.

The company expects to close the offering on or about Oct. 3.

Shares will be listed on the New York Stock Exchange under ticker symbol COMP.

Compass’ primary business is to provide listings, buying, selling and renting of real estate for buyers and renters as well as for investors in the secondary real estate market.

“We have been able to use technology and infrastructure built by our partners around the world to facilitate these transactions,” said CEO David Lereah in a statement.

“Now we can bring these same capabilities to the world of private-equity investing.”

The company was founded in 2014, and initially focused on real estate investment partnerships. In late April, it began listing homes on its platform and said it was “pleased with the early traction.”

Lereah said the company has about 1 million listings for homes for sale across more than 70 markets. “We are growing at a rate of about 20K properties a month. We are seeing that the more real estate we have on our platform the more consumers come to the site.”

Compass said in its filing that it plans to use IPO proceeds to invest in its business, including developing new technology and increasing marketing, and general and administrative expenses.

Morgan Stanley, Credit Suisse Group AG and Goldman Sachs Group Inc. are leading the offering.