Profitable proptech Place raises $100M at a $1B valuation as Goldman Sachs leads its first round of funding
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Many real estate technology companies are developing technology that is in competition with, or could potentially replace, real estate agents.
One startup that aims to help agents succeed and flourish with its technology and “bundled business services,” Place, has raised $100 million in a Series A round at a valuation north of $1 billion.
Goldman Sachs Asset Management’s growth equity business led the investment, which included participation from 3L Capital.
This round and company caught our attention for a couple of reasons. For one, prior to this financing, Place says it had not raised any external capital. Also, impressively and refreshingly, Place shared specifics around financials, saying that it was profitable from its first year in business: in 2020, the company’s top line revenue exceeded $85 million with more than $11 million in profit. In 2021, the company expects it will exceed $150 million in top line revenue.
Place emphasizes that it is not a brokerage. Rather, the two-year-old company describes itself as a “broker agnostic technology and business services solution” that works with top real estate producers from a variety of independent brokerage brands in the U.S. and Canada.
In a nutshell, Place wants to help real estate salespeople — regardless of what brokerage they are affiliated with — become business owners. More than 10,000 agents use its technology.
The Bellingham, Washington, startup is targeting the “top 20%” of agents as customers. Those agents, it claims, serve the majority of consumers that need to buy, sell or invest in real estate. Place co-founders and co-CEOs Ben Kinney and Chris Suarez have firsthand knowledge of the industry — each have two decades of experience as licensed real estate agents themselves.
Place says it can provide agents with assistance in 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, Kinney said, is that those agents see “significant increases” in their production, including growing sales volume, increasing agent productivity and more than doubling their bottom-line profitability.
“We provide a technology platform that provides top agents every tool and service they need to run their business all in one place,” Suarez told TechCrunch. “Our goal is to simplify the homeownership process for both agents and consumers.”
The company also provides property search as well as mortgage, title and insurance services for buyers as part of its effort to serve as a “one-stop shop.”
Most real estate agents don’t receive benefits, unless employed by specific startups that hire them as full-time employees. Kinney says that Place provides “industry unique benefits” such as health insurance for agents who average 2 sales a month, stock purchase plans and revenue share when agents recruit other agents in an effort to help “make it easier to recruit and retain” to their teams.
In the luxury real estate space, the startup powers brands such as The Bucher Group, Elizabeth Olcott and Associates, The Level Up Group, PDX Property Group and Spinelli Residential Group.
Looking ahead, the company plans to use its new capital to expand its products and services, continue to invest in its technology and, naturally, toward hiring. Presently, Place has 300 employees, up from 200 at the end of 2020. It anticipates boosting its headcount to 700 to 1,000 in 2022, according to Suarez. The startup also wants to scale into new markets and go deeper in existing markets; it is currently in 100 across the U.S. and Canada.
Paul Pate, a vice president in the growth equity business within Goldman Sachs Asset Management, said his firm was impressed by the fact that Place built its software first, specifically for top agent teams, and has seen strong commercial traction selling it standalone under its Brivity brand.
At the same time, he said, Place recognized that top agents need more than just software.
“They need a full-stack offering that fully abstracts away the complexity of running a business. We were encouraged by a full-stack business with clear validation of its technology on a standalone basis,” Pate wrote via email.
He added that Goldman views the company’s ability to serve agents across any brokerage affiliation as differentiated.
“You don’t need to leave your current brokerage to join Place,” he said.
Of course, Place is not the only company in this space. In late June, Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, raised “$50 million-plus” in a funding round that more than doubled its valuation to $2.5 billion. At the time, the startup said it was prepping for an IPO.