Smart Buildings

$180m Flows into Occupancy Analytics Companies as Market Anoints its First Unicorn

In the space of three days this week, two already well-funded Occupancy Analytics companies closed Series C and D rounds, underscoring (in case anyone was in doubt) investor confidence in the move to hybrid working driving demand for digital workplaces. On Monday, California-based Vergesense announced that it had closed a $60m Series C round led by Scale Venture Partners. This brings total funding for the Y-Combinator backed company to $82.6m. Their previous Series B round being closed only 11 months ago in December 2020. Not to be outdone, two days later New York-based Density announced that it raised a $125m Series D round led by heavyweight VC company Kleiner Perkins. This brings their total funding to $225m and the company’s valuation to $1.05b, which by our estimation makes them the first Occupancy Analytics unicorn. These levels of funding now set Density and Vergesense apart, in what is becoming a hyper-competitive tech sector, as companies vie […]

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In the space of three days this week, two already well-funded Occupancy Analytics companies closed Series C and D rounds, underscoring (in case anyone was in doubt) investor confidence in the move to hybrid working driving demand for digital workplaces.

On Monday, California-based Vergesense announced that it had closed a $60m Series C round led by Scale Venture Partners. This brings total funding for the Y-Combinator backed company to $82.6m. Their previous Series B round being closed only 11 months ago in December 2020.

Not to be outdone, two days later New York-based Density announced that it raised a $125m Series D round led by heavyweight VC company Kleiner Perkins. This brings their total funding to $225m and the company’s valuation to $1.05b, which by our estimation makes them the first Occupancy Analytics unicorn.

These levels of funding now set Density and Vergesense apart, in what is becoming a hyper-competitive tech sector, as companies vie to lead the digitization of workspaces. Our last analysis identified over 220 vendors competing for business, and whilst there are companies like Enlighted who are owned by Siemens, within the glut of Startups no one now comes close to having pockets as deep as Density and Vergesense.

In an article in early October we wrote, “Three startups, Density, Locatee and Mapiq have taken the lead in attracting investment this year from venture capital firms and real estate stakeholders to support their growth ambitions.” Now add Vergesense to this list. We have seen evidence that all 4 of these companies are gaining significant traction in the market.

“The emergence of hybrid work, post-pandemic, has fundamentally changed the nature and purpose of our buildings,” Density CEO Farah said in a statement. “Over the next five years, the vast majority of the built world will be instrumented for measurement. This new infrastructure will generate reliable, real-time utilization data; it will support the dynamic needs of hybrid work; and help designers, architects, and real estate and workplace teams improve the environment and spaces we use each day.”

This is an interesting statement, both confirming the move to hybrid working as a leading driver for workplace digitization and also underscoring the fact that this market opportunity goes well beyond simple room and desk booking use cases.

Indeed our 2020 Report estimated that the Global Occupancy Analytics market should rise to $5.73 Billion by 2024, growing at a Compound Annual Growth Rate of 21.5%. We will be updating this research at the beginning of next year, with a full bottom up analysis of the market and benchmarking of M&A / Investment data.

In parallel with this explosion in funding, we believe we are starting to see the process of consolidation speed up, as the market matures and competition intensifies. Curiously, almost hidden in the wider announcement of funding, Density said they had made their second acquisition this year. A company called HelixRE which creates digital twins of buildings to streamline data collection. Technology that should help Density to optimize measurement and provide better design of office spaces.

This is the fourth acquisition in this space in 6 months, with Nashi, Coworkr and Lone Rooftop all being acquired since June. We fully expect to see M&A activity ramp up over the next couple of years as well-funded vendors flex their financial muscle and companies who can’t gain enough traction look for the exit door.

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