Side Raises $150M at $1B Valuation - Empowering Real Estate Agents

Side Secures $150 Million in Series D Funding

Side, a technology firm specializing in real estate, has announced the completion of a $150 million Series D funding round. The company focuses on empowering real estate agents and independent brokerages to establish and operate as distinctive brands.

Investment Details and Company Valuation

Coatue Management spearheaded the investment, elevating Side’s valuation to $1 billion. This latest funding brings the total capital raised since the company’s 2017 launch to over $200 million.

Previous investors, including Matrix Partners, Trinity Ventures, and Sapphire Ventures, also contributed to this new financing round. This round represents a substantial increase from the $35 million Series C funding secured in November 2019.

The company’s valuation has also seen significant growth, increasing nearly sevenfold compared to the $150 million valuation recorded during its Series C round. Sapphire Ventures previously led that investment.

Financial Performance and Growth

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

In 2019, the collective annual home sales volume facilitated by Side’s partner agents exceeded $5 billion. Currently, the company’s network of agents represents an annual production volume surpassing $15 billion.

Founding Principles and Business Model

Side was established by Guy Gal, Edward Wu, and Hilary Saunders, based on the belief that many real estate professionals are inadequately supported by conventional brokerage structures.

According to CEO Guy Gal, traditional brokerages are often geared towards accommodating average performers. Consequently, high-achieving agents frequently bear the brunt of operational responsibilities.

Side employs a white-label approach, providing agents and teams with exclusive branding and marketing support. Simultaneously, it delivers the essential technology and back-end infrastructure required for efficient operation.

A Platform for Agent Empowerment

The objective is to enable partner agents to achieve predictable business growth and enhanced productivity. Gal draws a parallel between Side and Shopify, noting that both platforms empower businesses to own their brand and operations.

“Through Side, top-producing agents, teams, and independent brokerages can, for the first time, fully control their brand and business without the complexities of managing a brokerage,” Gal explained. “Years of focused problem-solving within this specific agent community have allowed us to leverage software for unprecedented efficiency gains.”

Addressing Misaligned Incentives

Gal contends that existing brokerages often disincentivize agents from maximizing their production. Lower transaction volumes from individual agents can lead to higher commission fees, creating a conflict of interest between brokerages and top performers.

“While top producers aim for growth and differentiation, brokerages often prioritize higher fees from fewer transactions, treating agents as interchangeable under a single brand,” Gal stated. “Side, in contrast, supports and empowers top agents and teams to expand and strengthen their own brands.”

Current Reach and Future Expansion

Currently, Side provides support to over 1,500 partner agents operating in California, Texas, and Florida.

The newly acquired capital will be allocated to significant recruitment efforts and expansion into new markets beyond its current operational areas. The company intends to increase its workforce by an additional 200 employees, supplementing its existing team of over 300.

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