In December 2020, Memoori posed the question “Will SPACs Offer an Alternative Exit Route for Companies in the Smart Buildings Space?”. The answer seems to be a resounding Yes! This research note highlights five of twelve SPAC (Special Purpose Acquisition Company) transactions in 2021, updating our view that this vehicle is gaining popularity as an alternative exit route. 

Memoori analysis of the companies which have announced or completedSPAC mergers in the smart buildings space in 2021 to date indicates that five US firms using this route provide access control or electronic locking solutions for the commercial and residential sectors, confirming the attractiveness of this technology to investors. 

The latest transaction to be announced was the public listing of Brivo, Inc., a supplier of cloud-based access control for commercial real estate, multifamily residential, and large distributed enterprises. Through a merger with Crown PropTech Acquisitions, a publicly traded special purpose acquisition company, the transaction values the company, at a pro forma enterprise value of $808 million. Eagle Eye Networks is also a strategic investor in the PIPE (Private Investment in Public Equity) transaction. Brivo was acquired by Dean Drako, CEO of Eagle Eye Networks, in 2015 for $50m.

Founded in 1999 and headquartered in Bethesda, MD, USA, Brivo serves a large, diversified global customer base with more than 44,500 customer accounts comprising over 300 million square feet of commercial property, 330,000 doors and 23 million credentialed Brivo users across 42 countries. 2021 revenues are estimated at $71.6 million.

Janus International completed a SPAC merger with Juniper Industrial Holdings in June 2021. The US group is a leading provider of turnkey self-storage, commercial and industrial building solutions including: roll-up and swing doors, hallway systems, relocatable storage units, and facility and door automation technologies. 

Juniper Industrial Holdings was founded by ex-Honeywell veterans, former CEO Dave Cote and Roger Fradin, who led their Automation & Control Solutions business, including security products, for many years. A September 2021 Janus investor presentation outlined their first-mover strategy in a nascent but largely untapped market for smart facilities and wireless management technology in the self-storage sector. This is based on their Nokē Smart Entry electronic locking system, acquired in 2018. With over 50% market share in self-storage for North America, Nokē represents a significant new revenue stream for Janus. 2021 group revenues are estimated in the range of $718 million to $738 million.

Latch, Inc., a US-based provider of building management solutions, completed a SPAC merger with TS Innovation Acquisitions Corp., a publicly-traded special purpose acquisition company launched by leading real estate owner, developer, operator, and investment manager Tishman Speyer, in June 2021

Latch, an electronic locking startup founded in 2014, supplies LatchOS, a full-building operating system of software, products, and services for apartment buildings. The company announced it was expanding its portfolio to commercial office space in May 2021. Their current offering includes smart access, visitor and delivery management, smart device and sensor control, connectivity, personalization and services. 2021 revenues are estimated at $38 million to $42 million.

SmartRent became a public company in August 2021 when it completed a SPAC merger with Fifth Wall Acquisition Corp 1. SmartRent, a provider of an enterprise smart home technology platform for property managers and residents, has a range of software and hardware, but places access control at the forefront of its portfolio. Their full-year revenue guidance in 2021 is in a range of $100 to $105 million.

Evolv Technology became a public company in July 2021 when it completed a SPAC merger with NewHold Investment Corp. Evolv offers a specialized form of access control with its weapons detection solution. The Boston area start-up founded in 2013, has developed security systems to detect anyone attempting to carry a weapon or other threat into venues without slowing the flow of visitors or employees. By fusing the latest sensors and Cortex AI, Evolv delivers weapons detection smart enough to screen thousands of people without the need to stop and empty pockets or remove bags.

A number of strategic investors retained their equity in the business on completion of the acquisition, including Stanley Ventures, the VC arm of Stanley Security and Motorola Solutions. Their full-year revenue guidance for 2021 is $20 to $23 million.  

These deals are an indication that IPOs via this route are gaining momentum and going mainstream in the smart buildings space.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.