Ori Allon built and sold one startup to Google, then another to Twitter. His new company, which turned one in May, is now worth more than both of those startups combined.
Urban Compass has raised a $US40 million series B round at a valuation that exceeds $US360 million. Investors include Conde Nast’s parent company Advance Publications, Joshua Kushner’s Thrive Capital, Peter Thiel’s Founders Fund, .406 Ventures, American Express CEO Kenneth Chenault and Salesforce founder Marc Benioff. The startup helps New Yorkers buy and rent apartments, and it raised $US20 million at a $US150 million valuation last October. Allon says his investors encouraged him to take more of their money so he could launch Urban Compass in other cities. Urban Compass is expected to roll out in Boston, Washington D.C., Chicago and possibly San Francisco later this year.
Allon is proud that his business has been making money since its first day. “We’ve built a real business and we’re growing, mostly by word of mouth. We’re helping people by giving our customers better real-estate tools,” says Allon.
By the end of last summer, Urban Compass was generating $US1 million per month and revenue has increased ten times since last June. Urban Compass’ home sales business, which launched last fall, has grown five times faster than its initial rental business, Allon says. The startup works with local real-estate agents on a commission basis. Urban Compass currently employs more than 100 people full-time and it expects to double its staff by the end of the year.
Allon says the technology he’s built significantly reduces the amount of time it takes to find a home. It’s a cleaner experience than Craigslist and the startup prides itself on timely, accurate listings which it displays both online and via mobile app. Addresses are shown on a Google-like map as well as pictures of the homes.
If you want to see an apartment, you can schedule a viewing on Urban Compass which will put together an itinerary for you (Urban Compass is like ZocDoc — a real-time doctor appointment tool — for house hunting). Urban Compass acts as a broker, taking between 0 and 15% per completed deal.
While Allon has sold his last two startups, he says Urban Compass is different. “I do not want anyone to buy me out this time,” Allon says. “Coming up with an idea and creating technology is exciting, but it’s more exciting to grow a company — especially one customers like.”