Robert Reffkin is an American entrepreneur known as the founder and CEO of Compass – a real estate technology company that provides software to real estate agents.
Early life and education
Robert Reffkin was raised by a single mom. Reffkin was also known as DJ Zahav, the Golden Hebrew.
In 1997, Robert Reffkin graduated from San Francisco University High School. In 1999, Reffkin earned Bachelor of Arts in Economic-Philosophy and History from Columbia University in New York City. In 2003, he earned his MBA from Columbia Business School.
Early career
In 1999, Robert Reffkin worked as Business Analyst – Generalist Group at McKinsey & Company. After spending two years at McKinsey, Reffkin left the company, and soon after, he focused on getting his MBA. In 2003, Reffkin worked as an Associate – Mergers & Acquisitions Group at Lazard until 2005.
At 25, Reffkin became a White House Fellow, during which he spent a year working with Treasury Secretary, John Snow. Then Reffkin returned to banking, spending five years as a Vice President at Goldman Sachs, and a year as a President and COO Gary Cohn’s chief of staff. In 2008, Reffkin raised $1.3 million to help the Success Charter Network open its first school in the Bronx.
Compass
In 2012, Reffkin co-founded Compass, along with Ori Allon as Urban Compass, an American real estate technology company. The company received $8 million of seed funding from Founders Fund, Goldman Sachs, Thrive Capital, as well as several individual investors including ZocDoc’s CEO, Cyrus Massoumi and American Express’ CEO, Kenneth Chenault. The initial business model hired full-time, salaried brokers, with whom users of the platform could schedule online appointments after searching for listings on the company’s mobile app or desktop.
At an event in May 2013, the company debuted publicly, where Michael Bloomberg, then-New York City Mayor helped celebrate the launch. The company initially concentrated only on rentals. In September 2013, the company raised $20 million in a Series A financing round, at a reported valuation of $150 million. Investors including Advance Publications, the CEO of Salesforce.com, Marc Benioff, and .406 Ventures all funded in Compass at this stage.
At early 2014, Compass stated they would begin the real estate sales business improve their overall business model by engaging independent real estate agents and getting a portion of their commissions. In July 2014, Compass raised $40 million in a Series B financing round, this time at a valuation of $360 million according to Bloomberg. Shortly thereafter, Compass confirmed a lease on 25,000 square feet of office space at 90 5th Avenue.
The firm also appointed Leonard Steinberg, from Douglas Elliman, a top-ranked real estate broker, to serve as its president. They described Leonard Steinberg as the agent with the highest sales volume in 2016 by Real Trends. The company reported having 70 staff and 125 agents at this time.
Compass has a reputation for employing top agents from competing agencies, but it has had problems maintaining them. In 2016, after just eight months at Compass, three top agents left the company and returned to Coldwell Banker. In December 2018, two agents quit Pacific Union International less than three months after its takeover by Compass, attaining $40 million in sales volume. In January 2019 it suffered two more high-profile luxury agent leaving in the San Francisco real estate market; one of them, Steve Gothelf, sold more than $1 billion of luxury real estate in the Bay Area.
In September 2015, Compass raised $50 million in a Series C financing round at a reported valuation of $800 million. The Institutional Venture Partners led the investment round. The company also started offices in Boston, Brooklyn, South Florida, and The Hamptons. In August 2016, Compass raised $75 million in a Series D financing round, led by Wellington Management, which brought its valuation higher than $1 billion. It also launched a mobile app that gives real-time data on the real estate market.
Earlier in the year, Compass expanded into Aspen with the purchase of Shane Aspen Real Estate as well as Los Angeles. Reports also cited the company’s expansion into San Francisco and Santa Barbara as well as several other smaller sub-markets of their other larger metro areas. During 2017, the company appointed several new executives to its leadership team, including a former Facebook and Amazon executive, Madan Nagaldinne as Chief People Officer, and a former Flywheel executive, Craig Anderson as a chief financial officer.
In November 2017, Compass declared $100 million in a Series E investment round by Fidelity Investments; followed by December 7, 2017 announcement of investment by Softbank Vision Fund of $450 million, later earning the company valuation to $2.2 billion. In late November, Compass also opened into Chicago signing the city’s number one real estate team. Additionally, Compass announced dynamic expansion plans to nine more cities.
The company declared a $400 million in a Series F funding at a valuation of $4.4 billion in less than a year later in September 2018. Qatar Investment Authority and Softbank Vision Fund led this series; other investors included Fidelity Investments, Institutional Venture Partners, and Wellington Management. Compass also stated plans to utilize these funds to join international markets and double down on producing world-leading technology. Compass planned to launch in Denver, Houston, and Nashville before the end of 2018.
Compass has increased its plan “20/20 by 2020”, by which it would earn in the top 20 markets of 20 percent market share by 2020. However, in January 2019 the company announced its purpose to halt the expansion, after struggling unspecified challenges. Robert Reffkin confirmed that the softening of the equity markets added to the decision not to join new markets in 2019.