Venture

Compass Execs Leave In Another SoftBank-Fueled Real Estate Exodus

Days after WeWork’s CEO, Adam Neumann, departed due to investor pressure, reports came out that another real estate company is facing a large executive exit as well: Compass.

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Compass, a New York startup that has raised $1.6 billion in known funding to date, has lost a slew of senior level individuals over the past eighteen months including its chief financial officer, chief marketing officer and chief technology officer, reports the Wall Street Journal.

Beyond both being real estate companies, Compass and WeWork have something else in common: SoftBank, the Japanese conglomerate bank known for large checks and sky rocketing valuations, is a massive investor.

When we last reported on Compass, the company was at a $6.4 billion valuation after raising a $370 million Series G round. It claimed it would be using the new capital to grow software and scaling operations, as well as expanding its East and West coast product and engineering hubs. SoftBank Vision Fund led Compass’ Series F round in September.

Let’s take a quick look at other instances where SoftBank has invested in a company with CEO turmoil.

Other Bets

Recall that SoftBank has pumped over $9 billion into WeWork, a company that loses a lot of money, over time. After revelations surfaced about Neumann and the company’s questionable finances, SoftBank reportedly led the push to make Neumann resign to a non-executive role.

With Neumann out of the way, SoftBank is in talks to offer a “$1 billion lifeline” to support WeWork as it struggles toward its public debut, reports The Financial Times.

And that’s just this week alone. One more startup that fits into the SoftBank CEO exodus category is Uber. The ride-hailing company went public in May.

Uber’s board of directors, including SoftBank, took down the company’s once CEO Travis Kalanick in a shareholder-led uprising.

Bottom Line

Other startups that lost executives this week include Juul, the electronic vaping company, and eBay, the ecommerce site.

Here’s what this all tells us: Silicon Valley isn’t the only locale fueling high stakes bets with the possibility of going awry. SoftBank-fueled affairs have their own set of risks. Corporate governance, it seems, isn’t solved by billions of dollars and big valuations.

Illustration Credit: Li-Anne Dias

Editor’s note: The article has been updated to reflect that departures have been occurring over a period of eighteen months.

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