Smart Buildings

Smart Building Q1 Venture Funding Declined 21% but still the 3rd Largest Quarter on Record!

This Research Note highlights our analysis of investments in the smart buildings space in the first quarter of 2022. We review how funding levels are faring compared with last year’s record of over $13 billion invested. Memoori has tracked 85 funding rounds amounting to over $3.5 billion across the smart buildings space in Q1 2022. Note that our analysis includes seed through growth-stage funding by venture capital firms, private equity and strategic investors in smart building, smart home and proptech solutions which address the management and operational phase of the building lifecycle and this definition therefore excludes technology investment for the design, construction, purchase, financing, leasing, and sale of real estate. Altogether, investor funding in the first quarter of 2022 declined 21% versus Q4 2021. However, the total is still historically high - up 95% on Q1 2021 and the third-biggest quarter on record after Q2 and Q4 in 2021. In terms of the number of funding rounds, Memoori recorded a decrease of 15% […]

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This Research Note highlights our analysis of investments in the smart buildings space in the first quarter of 2022. We review how funding levels are faring compared with last year’s record of over $13 billion invested.

Memoori has tracked 85 funding rounds amounting to over $3.5 billion across the smart buildings space in Q1 2022.

Note that our analysis includes seed through growth-stage funding by venture capital firms, private equity and strategic investors in smart building, smart home and proptech solutions which address the management and operational phase of the building lifecycle and this definition therefore excludes technology investment for the design, construction, purchase, financing, leasing, and sale of real estate.

Altogether, investor funding in the first quarter of 2022 declined 21% versus Q4 2021. However, the total is still historically high - up 95% on Q1 2021 and the third-biggest quarter on record after Q2 and Q4 in 2021.

In terms of the number of funding rounds, Memoori recorded a decrease of 15% versus Q4 2021 and a 13% increase on Q1 2021. 

Funding for smart building startups (firms founded since 2012) accounted for around 86% of total funding rounds in Q1 2022.  Our Startups Report series provides an overview of recent investments in the smart buildings space.

A noticeable trend was investor backing for later stage funding and growth capital, continuing to highlight an increased level of maturity and confidence in the smart building sector, with higher $ values in Series C, D and E rounds. Some examples are listed below:

  • Aurora Solar, a San Francisco, CA based provider of a software platform for residential and commercial solar sales and design, raised $200M in Series D funding.
  • Deepki, a French provider of a fully populated ESG data intelligence platform for the real estate sector, raised €150 million in a Series C round of funding.
  • Flock Safety, a U.S. public safety operating system that helps communities and law enforcement raised $150 million in Series E funding.
  • OfficeSpace Software, a U.S. provider of a hybrid workplace management platform received $150 million strategic investment.
  • Palmetto, a Charleston, SC-based clean energy marketplace and technology services platform provider, raised $375M in funding.

Strategic investors and corporate VC units participated in 40% of all deals in Q1. Some of the key investors during the first quarter of this year are highlighted below.

Brookfield Growth, the technology investment arm of Brookfield seeks to partner and invest growth equity into technology companies that can leverage the real assets and operating businesses that make up the wider $690 billion Brookfield business. The company participated in the following funding rounds in Q1 2022:

  • Facilio, an AI-powered property operations software platform based in New York City - with offices in Dubai, India and Singapore - raised a Series B $35M funding round.
  • PassiveLogic, creator of a "fully autonomous building platform", has secured $34 million in Series B funding.
  • Envoy, a US workplace platform that helps companies reopen safe and flexible workplaces, secured $111 million in Series C funding.

Honeywell Building Technologies, one of the leading building controls company, has partnered and completed strategic investments in several startups in Q1 2022: 

  • Honeywell announced a strategic investment in RapidSOS, as well as technology integrations between the two companies that will further digitize the public safety communications process. RapidSOS is the emergency response data platform used by more than 5,200 emergency communications centers (ECCs) worldwide.
  • Acalvio, a Silicon Valley based developer of autonomous deception technology has partnered with Honeywell to detect cyber attacks across operational technology (OT) environments in commercial buildings.
  • Oloid, creator of software-based physical access technology, announced the close of its $12 million Series A funding round, led by Dell Technologies Capital with participation from Honeywell Ventures. 

Global technology and engineering company Emerson also participated in the Virtual Peaker funding round through Emerson Ventures, its corporate venture capital initiative.

Lockheed Martin Ventures invested in Satellite Vu, a UK company founded to enable satellite technology to monitor the temperature of any building on the planet in near real-time using a new thermal infrared camera.

Q1 also saw utilities, energy service companies and oil and gas majors participate in funding smart building players:  

  • Berlin-based Solytic, a solar energy monitoring platform, raised €2 million (~$2.2 million) in funding. The round was led by German energy company EWE AG.
  • National Grid Partners participated in a Series A financing round of Copper Labs, a technology provider that unlocks real-time grid-edge data for gas, water and electric utilities.
  • Shell Ventures participated in a $75 million strategic investment in GridPoint’s advanced technology solutions for commercial building decarbonization, sustainability and resiliency.

A promising first quarter bodes well for a buoyant venture funding year in a maturing smart buildings space.

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

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