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December 18, 2012

Urban Compass Gets $8 Million in Seed Funding With Strong Backing from Industry Players

By David Gitonga, TMCnet Contributing Writer

Have you heard of Urban Compass (News - Alert)? Unlike other hyperlocal services such as Yelp with its user-generated review or Foursquare (News - Alert) with its social network hyperlocal approach, Urban Compass is a startup in stealth mode that promises to approach hyperlocal services in a different approach from everything that has been tried so far.

Before you dismiss it as just another online venture, consider this.

Before it even launched a product, the company managed to get the first round of investment totaling $8 million from Founders Fund, Goldman Sachs and Thrive Capital. The startup has also managed to catch the “eyes of faith” of Kenneth Chenault, the CEO of American Express, Marc Benioff, CEO of (News - Alert) and Cyrus Massoumi, the CEO of ZocDoc. This $8 million in seed money makes it one of 2012’s highest publicly-disclosed seed rounds. The money is expected to help track and hire best talent to build the product.

Another plus is that Urban Compass also has strong co-founders. One of these is a superstar engineer, Ori Allon, who started and sold two startups to Google and Twitter (News - Alert). His partner, Robert Reffkin, is a superstar ex-Goldman Sachs banker. Ori left a management position at Twitter as Director of Engineering in New York and is an accomplished entrepreneur and engineer. One of his two successful exits was a relatively early-stage startup which was bought by Google (News - Alert) before it was developed into a full-fledged company. Orion sold his PhD thesis in which he developed a new search algorithm called Orion that Google incorporated into its wider search algorithm.

Additionally, Reffkin has banking background and ties to nonprofit work, which would explain the strong financial backing of their startup at this early stage. According to Reffkin, the people behind the funding are as important as the actual value of the money.

Furthermore, the selection of investors was intentional due to what each investor brings to the table; Goldman Sachs brings operational expertise, Founders Fund brings entrepreneurial and scaling expertise while the other backers get the company to the people needed to implement the product. Reffkin also said that he is not looking to raise money only in the near term.

While the co-founders do not have a whole lot to say about Urban Compass, it is clear that they are trying to disrupt a large industry with some social element in it. Let us hope that Urban Compass will be the compass we need to find useful information one day.

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