Real estate technology and services firm Place has raised the first outside capital in its history: a $ 100 million Series A round of funding led by Goldman Sachs Asset Management, for a valuation of more than $ 1 billion .
Have you never heard of Place? It is not a surprise.
“We don’t have a press service. We do not have a marketing department. We’ve only had one sales rep in the past two years, ”said Ben Kinney, Place co-founder, serial entrepreneur and real estate agent, in an interview with GeekWire. “We just went into hiding in Bellingham, Wash., Doing our stuff.”
They have profits, which is why they didn’t need these other things.
Place, headquartered in the scenic seaside community 88 miles north of Seattle, generated $ 85 million in revenue in 2020, with $ 11.3 million in profit, and the company expects $ 150 million. dollars in revenue this year with a proportional amount of profit, Kinney said.
Kinney founded Place in 2019 with Chris Suarez of Portland, who owns several Keller Williams real estate franchises. Place named Chris Stuart, former CEO of Berkshire Hathaway HomeServices, chairman in May.
Despite the origins of its leaders, Place is not a real estate brokerage house. The company is a partner and service provider for real estate agents and brokers, who can continue to work with established real estate brokerages using Place’s technology and services.
The company offers what it describes as “a suite of end-to-end software and business services solutions that include administrative support, marketing and branding, lead generation, accounting, legal, human resources, back office infrastructure and training for all positions. . ”
Place offers its products in three different models, Kinney said: software as a service, allowing agents to license its products à la carte; a partnership model where agents use all the services of Place and share part of their profits with the company; and consumer services, including mortgage, title and escrow.
In the case of the full partnership model, the proportion of profit sharing varies, Kinney said. In this scenario, the agents are independent contractors and Place also covers some of their losses if they are unable to make a profit.
The business got off to a good start technologically with Brivity, a real estate software company that Kinney started with the product of his other businesses for eight years. Brivity is now owned by Place.
So why raise funds?
“We really wanted to refine our model and make sure it was something that we believed in and could evolve,” Kinney said. “Once we established that we have the capacity to continue to double our revenues and add these basic services, we realized that it was in our best interests to raise capital and promote awareness of who we are. “
Place has around 300 employees, about half of them in western Washington, working remotely or from its Bellingham offices. The company plans to significantly increase its workforce in the coming years, Kinney said. It will ultimately establish a presence in the Seattle market to help boost its recruiting, he said.
The company spent $ 3 million to acquire the Place.com domain name, Kinney said, describing it as a milestone in Place’s ambitions to build a consumer brand to support agents who use its technology and services. .
In some ways, Place looks like Zillow before the Seattle-based company expanded into direct home buying and selling (a business unit Zillow abruptly closed earlier this month).
“Our long-term future is to have search, home and other tool values,” Kinney acknowledged. However, unlike similar Zillow tools, he said the target market will be “the agent the consumer already has a relationship with instead of using it as a tool to connect them with random agents they don’t know. not”.
Kinney previously acquired ActiveRain, a social network for real estate agents, from Zillow in 2015 as part of a larger real estate business combination under the Ben Kinney Companies.
Place plans to use the $ 100 million funding to grow its business through acquisitions, technology investments and other growth initiatives. In addition to Goldman Sachs, growth capital investor 3L Capital participated in the round table.
Kinney and his co-founder Suarez were together in a session at a recent Inman real estate conference when they received a message that the funding had been transferred to the company’s account.
Afterward, as they walked up the escalator, Kinney told Suarez, “I kind of thought it would be different,” he recalls. “And he said, ‘Yeah. I guess we just got back to work. And that’s all we said about it.
Kinney explained, “That sort of thing is not the finish line. This is the starting line.