This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori. Part 2 of 2 articles covering Q1 M&A and investments in smart buildings. See Part 1 here.

In the first quarter of 2019, the Smart Buildings space, including startups and established players, continued to attract the high levels of investment seen in 2018. By the end of March, Memoori recorded 69 funding rounds valued at $925 million.

The number of deals was slightly higher than in Q4 2018, in which 60 funding rounds attracted $1,918 million. However, when one discounts the unusually massive investment by Softbank in the November 2018 Series H round of View, the smart glass company amounting to $1.1 billion, total capital invested in Q4 was $818 million.

Highest Funded Deals over $100 million were in Electronic Locking & Smart Glass

A Chinese smart home startup founded in 2017, Youdian Technology, completed its Series B round of $104M in January 2019, backed by Alibaba Capital Partners, the investment arm of Alibaba Group. Youdian offer an IoT platform focusing on smart locks and other security products for the smart home.

Kinestral Technologies, Inc., the US developer and manufacturer of Halio, an advanced smart-tinting glass product for buildings, announced that the company has closed Series D funding of over $100M led by SK Holdings, one of the largest conglomerates in South Korea.

Yellow Door Energy, a leading UAE-based provider of distributed solar and energy efficiency solutions for commercial and industrial customers in the Middle East and Africa raised $65M in Series A financing led by International Finance Corporation (IFC), a World Bank member, Mitsui & Co., Ltd., Equinor Energy Ventures, Arab Petroleum Investments Corporation (APICORP) and UAE-based Adenium Energy Capital.

Investors Continue to Back Building Energy & Asset Management Platforms

Envizi, an Australian-based player in data and analytics software providing real-time, equipment-level data for building optimization and sustainability, secured a strategic investment from Accel-KKR, a Silicon Valley technology-focused private equity firm. The funding will help Envizi continue its global expansion with a particular focus on the North American and UK markets.

Measurabl, the San Diego, California-based provider of a software platform for sustainability benchmarking and reporting, completed a Series B $18.7M round in January this year, with the backing of Sway Ventures, S&P Global and Camber Creek. The Measurabl platform provides an important view of environmental, social and governance (ESG) data metrics for commercial real estate. The investment by S&P Global is likely to expedite the position of the Measurabl Sustainability Rating as a globally recognized accreditation.

Prior to the acquisition of Entic in March 2019, Aquicore received $25.9M in funding from undisclosed investors, although the acquisition announcement subsequently confirmed that the joint company is backed by top institutional investors in real estate technology, including The Blackstone Group, ClearSky, Navitas Capital, Normandy Real Estate Partners and Fifth Wall Ventures.

Funding for alternative ways to control access to buildings has been a focus this quarter, with investment in technologies based on AI, biometrics, sensing and video analytics, including:

Alcatraz AI aims to replace badging as an access point identification method in the workplace by leveraging facial recognition, 3d sensing and AI for physical access control. The US startup completed a $6M Series A round in March 2019, with JCI Ventures, the investment arm of Johnson Controls, participating in the investment.

Proxy, founded in 2016, is the developer of Proxy Signal, a smartphone powered universal identity signal that brings frictionless access into today’s workplace. With Proxy, users own their identity and have control over their privacy and personal data. The company raised $13.6M in Series A funding in a round led by Kleiner Perkins with participation from WeWork, Y Combinator and Coatue management. WeWork, Dropbox, and Hines are currently using Proxy for access through secured doors, elevators and turnstiles in their workplaces.

AnyVision, an Israeli provider of AI-based face, body and object recognition software, announced new funding of $15M in January 2019 from Lightspeed Venture Partners and Qualcomm Ventures, bringing its Series A round to a total of $43M. The round, which was first announced in June 2018 was led by Bosch Building Technologies, who have acquired a 9% stake in the company.

The most activity in the quarter was in the PropTech sector which attracted 25% of total funding with investments this quarter in technologies based on Indoor mapping and location services (Kaarta, InnerSpace, Pozyx, Humatics, BeaconInside) and Smart Water management (Ketos, VivoAquatics). One notable investment in the sector was Siemens Next47 investment in Avidbots, the developer of Neo, a robotic floor scrubber widely deployed in airports, warehouses, manufacturing sites, malls, universities, and other commercial spaces.

Smart Home and MFH Sector Attracted 24% of Total Investments

Another notable funding round was in energy disaggregation technology. Sense is a provider of a home intelligence platform and a device installed in an electrical panel that interprets the power usage and activity of devices in the home. Landis+Gyr and Sense announced a partnership in January 2019 that makes Sense technology available within Landis+Gyr’s Gridstream Connect IoT platform, enabling utilities to provide a wide range of home energy management services to consumers. Landis+Gyr has joined Schneider Electric, Energy Impact Partners, Shell Ventures, Prelude Ventures, Capricorn Investment Group, and iRobot in bringing Sense’s B round to $20M.

Memoori is continues to track M&A and Funding Investments in the Global Smart Buildings Space. Deals included in this analysis cover companies targeting both commercial and industrial buildings and smart homes.

We focus on innovation in the ‘Operate and Manage’ phase of the building life cycle encompassing IoT in buildings, energy management, physical and cyber security, proptech, facilities optimization, occupant comfort, workplace experience and more.

We expect to publish our annual analysis of deals in early 2020. In the meantime, if you are interested in receiving a regular quarterly update such as this article, please get in touch – daphne.tomlinson@memoori.wpengine.com.