Compass, the technology platform for real estate, now worth $ 4.4 billion, has made an acquisition to give its agents a boost when it comes to finding good leads for real estate for sale. Contactually acquires Contactually, an AI-based CRM platform designed specifically for the industry. These include features such as linking a list of properties sold by a brokerage firm to records of sales in the region and other real estate indices to determine which properties may be good targets
Contactually already had its own one introduced last year Powered by Compass's CRM service, there is already some degree of integration between the two.
The terms of the deal are not published. Crunchbase notes that Contactually had collected approximately $ 1[ads1]8 million from VCs, including Rally Ventures, Grotech and Point Nine Capital, and PitchBook's most recent value was approximately $ 30 million in 2016. As far as I know, the startup had a strong market penetration, so the price was probably a bit higher than this previous rating.
The plan is to take over Contactually's entire 32-person team headed by Zvi Band. the co-founder and CEO to fully integrate the company's product into the Compass platform . They will report to CTO Joseph Sirosh and the head of the product Eytan Seidman. This also means a major operation for Compass in Washington, DC, where Contactually was founded.
"The Contactually team has been working for the past 8 years to build a best-in-class CRM that automatically and automatically builds relationships." We are proud to announce that our investment in machine learning has become such a new feature as Best Time has led to email and other data-driven follow-up recommendations that help agents work more effectively on their day. today. After working closely with the Compass team, it was obvious that uniting forces would accelerate our mission to build the industry's future. For the time being, customers who already use the product – and a large number of real estate brokers and agents in the US have been trading at prices ranging from $ 59 / month to $ 399 / month depending on service levels continue so far.
I suspect that this is a long-term one. The plan, however, will be a little different: you have to wonder if agents competing against Compass would like to use a service that processes their data, and I suspect Compass itself of having this technology for itself That would give the others an advantage.
Compass, I understand from sources, is well on its way to generating $ 2 billion in revenue in 2019 ($ 1 billion in 2018 was $ 34 billion worth of real estate sales) would double that this year). In 100 cities, Ori Allon and Robert Reffkin have been far away since their founding in 2012.
The bigger picture beyond real estate is that, as in many other analog industries, those who engage in tech-first approaches are not only catching up with existing business, but in many cases helping the entire market expand. As an instrument that can help find potential real estate for sale that owners did not previously consider entering the market, Compass could end this goal also comes at an interesting time. As mentioned earlier, the housing market is expected to cool this year and this will force agents who do not have strong customer networks and the means to maximize the opportunities available to list and sell properties
People from Opendoor – who seem to be gathering money and approaching Compass in valuation – are also trying out another model that essentially involves becoming a middle part of the chain, buying real estate from sellers and selling them to buyers to speed up the process and eliminate some of the end user's costs. This approach highlights the fact that while infusion of technology is an inevitable trend, there are several ways to apply it.
This seems to be the first full acquisition of a tech startup by Compass, even though some acquisitions have been made in the past.