Profitable proptech Place Raises $ 100 Million at $ 1 Billion Valuation as Goldman Sachs Leads First Round of Funding
Many real estate technology companies are developing technology that either competes with or could potentially replace real estate agents.
A startup that aims to help agents succeed and thrive with its technology and “bundled business services” Place, raised $ 100 million in a Series A round to a valuation north of $ 1 billion.
Goldman Sachs Asset Management’s equity growth activity led the investment, which included the participation of 3L Capital.
This tour and company caught our attention for several reasons. On the one hand, before this financing, Place claims not to have raised any external capital. Also, impressively and refreshingly, Place shared details around finance, saying it was profitable in its first year in business: In 2020, the company’s revenue topped $ 85 million with over $ 11 million in profit . In 2021, the company expects to exceed $ 150 million in revenue.
Place emphasizes that it is not a brokerage house. Rather, the two-year-old company describes itself as a âbroker-agnostic business services and technology solutionâ that works with top real estate producers from a variety of independent brokerage brands in the United States and Canada.
In a nutshell, Place wants to help real estate sellers, no matter which brokerage they are affiliated with, become business owners. More than 10,000 agents use its technology.
The Bellingham, Wash., Startup is targeting the âtop 20%â of agents as customers. These agents, he says, serve the majority of consumers who need to buy, sell or invest in real estate. Place co-founders and co-CEOs Ben Kinney and Chris Suarez have first-hand knowledge of the industry – each with two decades of experience as licensed real estate agents themselves.
Place says it can provide agents with assistance with administrative support, marketing and branding, lead generation, accounting, legal, human resources, back office infrastructure and training for all positions so that “they have more time to help buyers buy and sellers sell. The end result, said Kinney, is that these agents are seeing ‘significant increases’ in their production, including increased sales volume, increased agent productivity and more than double their profitability.
Image credits: Place
âWe provide a technology platform that provides the best agents with all the tools and services they need to run their business in one place,â Suarez told TechCrunch. âOur goal is to simplify the homeownership process for agents and consumers. “
The company also provides property search, mortgage, title and insurance services to buyers as part of its efforts to serve as a “one-stop-shop.”
Most real estate agents don’t receive any benefits unless they’re employed by specific startups who hire them as full-time employees. Kinney says the place offers “unique to the industry benefits” such as health insurance for agents who average 2 sales per month, stock purchase plans and a share of revenue when agents recruit other agents in order to help “Facilitate recruitment and retention” to their teams.
In the field of luxury real estate, the startup propels brands such as The Bucher Group, Elizabeth Olcott and Associates, The Level Up Group, PDX Property Group and Spinelli Residential Group.
Going forward, the company plans to use its new capital to develop its products and services, continue to invest in its technology and, of course, to hire. Currently, Place has 300 employees, against 200 at the end of 2020. It plans to increase its workforce to 700 to 1,000 in 2022, according to Suarez. The startup also wants to expand into new markets and deepen existing markets; it is currently in 100 across the United States and Canada.
Paul PatÃ©, vice president of growth capital activities at Goldman Sachs Asset Management, said his company was impressed that Place first built its software, specifically for top agent teams, and gained strong commercial traction by selling it independently under its Brivity brand.
At the same time, he said, Place recognized that the best agents need more than just software.
âThey need a comprehensive offering that completely takes the complexity out of running a business. It’s rare that we can invest in a full stack business with clear technology validation on a stand-alone basis, âPate wrote via email.
He added that Goldman views the company’s ability to serve agents across any brokerage affiliate as differentiated.
âYou don’t have to leave your current brokerage to join Place,â he said.
Of course, Place isn’t the only business in this space. In late June, Side, a real estate technology company that strives to turn independent agents and brokerages into boutique brands and businesses, raised “over $ 50 million” in a fundraising round that more than doubled its valuation to $ 2.5 billion. At the time, the startup said it was preparing for an IPO.