Smart Buildings

Record Funding in Smart Buildings Sector with $5.1 Bn Invested in H1 2021

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

Funding in the Smart Buildings sector is at an all-time high as H1 2021 deal values of over $5.1B surpassed the previous record by over 5% compared with H2 2018 ($4.9B) and by over 14% in H2 2020 ($4.5B).  In terms of the number of transactions, Memoori recorded 170 funding rounds, a decrease of around 12% from H2 2020, when over 190 deals were identified. 

Although the number of deals decreased, we are seeing an increase in US dollar values across all types of funding.  Seed funding, Series A to E rounds and growth capital all attracted higher levels of investment in the sector. 

The Proptech segment attracted over 30% of funding rounds this half year. The Memoori “proptech” definition focuses on real estate technology which addresses the management and operational phase of the commercial and industrial building lifecycle across ten technology areas. It therefore excludes technology for the design, construction, purchasing, financing, leasing and sale of commercial real estate. Of note were investments in the following areas:

A noticeable trend in this half-year was investor backing for later stage funding and growth capital, indicating a greater level of maturity and confidence in the smart building sector, with increased $ values in Series C, D, and E rounds. Some examples are listed below:

  • Claroty, a NYC-based industrial cybersecurity company that helps customers protect and manage their Internet of Things (IoT) and operational technology (OT) assets, raised $140M in a Series D pre-IPO round of funding.
  • RapidSOS, a US data-driven emergency response technology company, closed an $85M Series C funding led by global venture capital and private equity firm Insight Partners. 
  • HqO closed a $60 million Series C funding round in April 2021, bringing the company’s total funding to $106.9 million. 
  • iLobby, a Toronto, Canada-based provider of enterprise visitor management software, completed a $100M strategic investment from Insight Partners.
  • SimpliSafe, the US provider of DIY home security systems and professional monitoring solutions, raised $130 million in growth funding.
  • Project financing of $500M was completed by Greenstruxure, a developer and operator of microgrids. The Schneider Electric and Huck Capital joint venture will offer customers in medium-sized U.S. commercial and industrial facilities a turnkey Energy as a Service solution that gives them the energy outcomes they need to meet their business and sustainability goals with no upfront capital outlay and no operational risks.

Strategic investors and corporate VC units participated in 39% of all deals in H1. Two significant investments are highlighted below:

  • Viessmann, the German HVAC equipment manufacturer, completed a strategic investment in Priva, a second-tier Dutch manufacturer of building management systems. The minority stake enables Viessmann to rapidly develop its business in climate solutions for commercial buildings.
  • Schneider Electric acquired a 30% minority stake in Uplight, formerly known as Tendril, a Software as a Service (SaaS) solutions provider to more than 80 regulated utility companies representing 110 million residential, commercial and industrial end-users in North America.  The strategic investment in Uplight will enhance Schneider Electric’s existing EcoStruxure Grid offering and has further potential to play a key enabling role between Smart Grid, Smart Home and Smart Building.

Bearing in mind that 18% of the funding rounds did not disclose investment amounts, an unprecedented level of financial support is currently being pumped into the smart buildings sector.

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