SoftBank-backed Compass valued at $8.22 billion in NYSE debut

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(Reuters) -Shares of SoftBank Group Corp-backed Compass Inc jumped 18% in their stock market debut on Thursday after being priced at the lower end of the reduced initial public offering (IPO) price range.

Stock opened at $21.25, above the IPO price of $18 per share, giving the real estate brokerage firm a market value of $8.22 billion, and a fully diluted valuation of over $10 billion, which includes options and restricted stock.

The company, which downsized its IPO and reduced its price target range, sold 25 million shares on Wednesday, raising about $450 million. It was earlier looking to raise about $936 million by selling 36 million shares at the upper end of its initial price range of $23 to $26 per share.

"It's been a very challenging IPO market this week, we had multiple companies pull their IPOs. So I'm very happy that Compass was able to have a successful IPO," Chief Executive Robert Reffkin said in an interview.

Founded in 2012 by former Twitter Inc engineer Ori Allon and former Goldman Sachs executive Robert Reffkin, New York City-based Compass serves over 19,000 residential real estate agents through an integrated software platform that helps them source and close deals, as well as managing client relationship.

It recorded about $152 million in transactions in residential real estate last year, a recent regulatory filing showed, which represents nearly 4% of the U.S. market.

Compass saw a surge in online home transactions during the COVID-19 pandemic, with revenue jumping 56% to $3.7 billion in 2020, while losses narrowed to $270.2 million from $388 million a year earlier.

The company had raised $1.5 billion from investors, including Goldman Sachs and Canada Pension Plan Investment Board, before its IPO. It was valued at $6.4 billion after a $370 million funding round in 2019.

Goldman Sachs, Morgan Stanley and Barclays were the lead underwriters for the offering.

(Reporting by Sohini Podder in Bengaluru, Krystal Hu in New York and Echo Wang in Miami;Editing by Vinay Dwivedi and Marguerita Choy)