Real estate startup Place comes out of nowhere with $100M round, led by Goldman at $1B valuation
Real estate technology and services company Place just raised the first outside capital in its history: a $100 million Series A round led by Goldman Sachs Asset Management, at a valuation of more than $1 billion.
Never heard of Place? That’s not a surprise.
“We don’t have a press department. We don’t have a marketing department. We’ve only had one sales rep for the last two years,” said Place co-founder Ben Kinney, a serial entrepreneur and real estate agent, in an interview with GeekWire. “We’ve just been hiding in Bellingham, Washington, doing our stuff.”
They do have profits, which helps to explain why they haven’t needed those other things.
Place, headquartered in the picturesque 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 in revenue this year with a proportional amount of profit, Kinney said.
Kinney founded Place in 2019 with Chris Suarez of Portland, who owns multiple Keller Williams real estate franchises. Place named Chris Stuart, former CEO of Berkshire Hathaway HomeServices, as its president in May.
Despite the backgrounds of its leaders, Place is not a real estate brokerage. The company is a partner and service provider to real estate agents and brokers, who are able to continue working with established real estate brokerages when using Place’s technology and services.
The company offers what it describes as “an end-to-end suite of software solutions and business services 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 under three different models, Kinney said: software as a service, allowing agents to license its products a la carte; a partnership model where agents use all of Place’s services and share a portion 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 the profit split varies, Kinney said. In that scenario, the agents are independent contractors, and Place also covers a portion of their losses if they aren’t able to turn a profit.
The company had a running start on the technology front through Brivity, a real estate software company that Kinney bootstrapped with proceeds from his other businesses for eight years. Brivity is now owned by Place.
So why raise money at all?
“We wanted to truly refine our model and make sure that it was something that we believed in and that we could scale,” Kinney said. “Once we established that we have the capacity to continue doubling in revenue and adding these core services, we understood that it was in our best interest to raise capital and to get the word out about who we are.”
Place has about 300 employees, about half of them in Western Washington, either working remotely or in its Bellingham offices. The company plans to dramatically increase headcount in the years ahead, 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 an important step in Place’s ambitions to build a consumer brand in support of the agents that use its technology and services.
In some ways, Place sounds like Zillow before the Seattle company expanded into the direct buying and selling of homes (a business unit that Zillow abruptly shut down earlier this month).
“Our long term future is having search, and home values and other tools,” Kinney acknowledged. However, in contrast with Zillow’s similar tools, he said the target market will be “the agent who the consumer already has a relationship with instead of using it as a tool to connect them with random agents that they don’t know.”
Kinney previously acquired ActiveRain, a social network for real estate agents, from Zillow in 2015 as part of a larger rollup of real estate ventures under the Ben Kinney Companies umbrella.
Place plans to use the $100 million in funding to expand its business through acquisitions, technology investments, and other growth initiatives. In addition to Goldman Sachs, growth equity investor 3L Capital participated in the round.
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 wired to the company’s account.
Afterward, as they were going up the escalator, Kinney told Suarez, “I kind of thought this would feel different,” he recalled. “And he said, ‘Yep. I guess we just get back to work.’ And that’s all we said about it.”
Kinney explained, “This sort of thing is not the finish line. It’s the starting line.”