Many real estate technology companies are developing technology that is in competition with real estate agents.
Place raised $100 million in a Series A round at a valuation north of $1 billion, a startup that aims to help agents succeed and flourish with its technology and business services.
3L Capital participated in the investment, which was led by Goldman Sachs Asset Management.
This round and company caught our attention because of a couple of reasons. Place had not raised any capital before this financing. In its first year in business, Place achieved top line revenue of $85 million and a profit of more than $11 million. The company expects to make $150 million in revenue in 2021.
Place emphasizes that it is not a broker. The two-year-old company describes itself as a broker 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.
Place wants to help real estate salespeople become business owners, regardless of their affiliation with a particular broker. More than 10,000 agents use it.
The top 20% of agents are being targeted by the startup. The majority of consumers that need to buy, sell or invest in real estate are served by those agents. The co-CEOs of Place have been in the industry for two decades, and both have experience as real estate agents.
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 result 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.
The place is image credits.
Top agents can use a technology platform that provides every tool and service they need to run their business all in one place. The goal is to simplify the homeownership process.
As part of its effort to serve as a one-stop shop, the company provides property search, mortgage, title and insurance services for buyers.
Most real estate agents don't get benefits unless they are hired as full-time employees by a specific startup. 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 make it easier to recruit and retain.
The startup powers brands such as The Bucher Group, Elizabeth Olcott and ASSOCIATES, The Level Up Group, PDX Property Group and Spinelli Residential Group.
The company plans to use its new capital to expand its products and services and to continue to invest in its technology. At the end of 2020, Place had 200 employees. It expects to increase its staff to 700 to 1,000 in the next few years. The startup is currently in 100 markets in the U.S. and Canada, but it wants to go deeper in existing markets.
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 independently.
He said that Place recognized that top agents need more than just software.
They need a full-stack offering that eliminates the complexity of running a business. Pate wrote via email that it's rare that we can invest in a full-stack business with clear validation of the technology.
Goldman thinks the company can serve agents across any affiliation.
He said that you don't need to leave your current broker to join Place.
Place isn't the only company in this space. Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, raised $50 million in a funding round that more than doubled its valuation to $2.5 billion. The startup said at the time that it was preparing for an IPO.
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