Actual property brokerage Compass is shutting down its Modus title enterprise as a part of cost-cutting strikes the New York Metropolis firm made this week.
Modus was a Seattle startup that automated the title and escrow part of closing on a house. Compass acquired the corporate and greater than 60 workers in 2020.
Compass additionally introduced that it was shedding about 450 folks, about 10% of its workforce.
The cuts come amid a cooling U.S. housing market pushed by elevated mortgage charges. Redfin, one other tech-fueled actual property brokerage, additionally introduced layoffs this week.
In a regulatory submitting, Compass mentioned it should proceed to supply title and escrow companies.
“The Strategic Actions are a part of a broader plan by the Firm to take significant actions to enhance the alignment between the Firm’s organizational construction and its long-term enterprise technique, drive value efficiencies enabled by the Firm’s expertise and different aggressive benefits, and proceed to drive towards profitability and constructive free money move,” the submitting famous.
Based in 2018, Modus had raised $14 million from backers together with NFX, Felicis Ventures, Liquid 2 Ventures, and others.
The corporate was led by CEO and co-founder Alex Day; Chairman Jai Sim; and Abbas Guvenilir. Day and Sim beforehand labored at lunch supply firm Peach; Guvenilir spent practically six years at ServiceNow earlier than teaming up with Day and Sim.
Day informed Startup that the choice to close down Modus “was definitely stunning and difficult for our colleagues and prospects.”
“Nonetheless, the outpouring we acquired from our actual property agent shoppers was deeply particular and reminded everybody at Modus that we constructed an industry-changing firm from nothing in a number of brief years,” he mentioned in a press release. “Whereas this journey is winding down for us all, everybody’s accomplishments are without end.”
A Compass spokesperson shared this assertion: “We’re grateful to the Modus workforce for his or her dedication to offering the absolute best service to their prospects. We proceed to champion entrepreneurs in our {industry} and want Alex and Jai all the perfect of their future endeavors.”
Compass, which went public final yr, opened a big Seattle tech heart in 2019.
Compass laid off about 375 workers in March 2020 because of the pandemic.
Its inventory was down greater than 6% Thursday, buying and selling at lower than $4/share, down from $20/share when it went public in April 2021. The corporate posted a $494 million loss in 2021.
Editor’s observe: Story up to date with feedback from Day and a press release from Compass.