Side Raises $50M at $2.5B Valuation, Eyes IPO

Side Secures Funding, Valuation Surpasses $2.5 Billion

Side, a real estate technology firm focused on empowering agents and independent brokerages to establish unique brands, has successfully completed a funding round exceeding $50 million. This investment more than doubles the company’s valuation, now reaching $2.5 billion.

Recent Funding and Growth

This latest financial injection arrives only three months following a $150 million Series D round led by Coatue Management, which valued the San Francisco-based company at $1 billion. Tiger Global Management spearheaded the current investment, with additional participation from ICONIQ Capital and D1 Capital Partners.

Since its founding in 2017, Side has now raised over $250 million in total funding. Earlier investment rounds were led by Matrix Partners, Sapphire Ventures, Trinity Ventures, and 8VC.

IPO Potential

The company highlights its backing by three leading technology underwriters for initial public offerings (IPOs), suggesting a potential IPO in its future. This recent funding is considered a significant step towards that possibility.

Revenue and Sales Volume

Side generated revenue between $30 million and $50 million in 2020, and anticipates a doubling of this figure in the current year.

In 2019, the collective annual home sales volume represented by Side’s partners exceeded $5 billion. Currently, the company’s network of agent partners represents over $15 billion in annual production volume.

Projections indicate that Side will close over $20 billion in home sales by the end of 2021, potentially establishing it as a top 10 national brokerage based on volume.

Market Expansion and Agent Support

Currently, Side provides support to over 1,800 partner agents operating in California, Texas, and Florida. The company reports a 200% year-over-year increase in agent-represented home sales within these markets.

Plans are in place to expand operations into 15 additional states before the end of the year.

Founding Principles

Guy Gal, Edward Wu, and Hilary Saunders founded Side based on the belief that many real estate agents are inadequately supported and recognized by conventional brokerage models.

Addressing Brokerage Limitations

According to CEO Gal, traditional brokerages are structured to cater to average agents, leaving top performers to handle the majority of the workload.

The Side White-Label Model

Side’s unique white-label approach focuses on exclusively promoting the boutique brand of agents and teams, while simultaneously providing the necessary technology and backend support.

The objective is to enable partner agents to achieve predictable business growth and enhance their overall productivity.

“Consider Side in the same way you view Shopify’s role in e-commerce,” Gal explained during the company’s previous funding round. “Through Side, top-producing agents, teams, and independent brokerages gain complete ownership of their brand and business, without the burden of operating a brokerage.”

“Years of addressing the specific challenges faced by this agent community have allowed us to leverage software to deliver unprecedented efficiency.”

Misaligned Incentives

Gal argues that existing brokerages often disincentivize agents from becoming high producers, as agents handling fewer clients may be subject to higher commission fees per transaction. This creates a conflict of interest between brokerages and their top performers.

“While top producers aim to expand and differentiate, brokerages often prioritize maintaining higher fees from a larger number of agents operating under a unified brand,” Gal stated. “Side, instead of hindering the growth of top agents and teams, empowers them to scale their businesses and strengthen their brands.”

Note: This article has been updated to reflect the corrected valuation figure.