Last week, the smart home company Alarm.com filed with the US SEC to list its common stock on the NASDAQ Global Select Market under the ticker symbol ALRM. They are seeking to raise $75m from the share offering.
Alarm.com offers a platform solution for the connected smart home which includes video monitoring and energy management. They also serve the small business market, however according to their filing the substantial majority of their 2.3 million subscribers are residential. Indeed that would put them in a market leading position in the US, ahead of competitors like ADT pulse and Comcast Xfinity.
The filing also shows that in 2014, the company posted net income of $13.5 million, up from $4.5 million in 2013. Revenue rose to just over $167 million from around $130 million.
In July 2012, Alarm.com raised $136 million from VC firm Technology Crossover Ventures, who are no doubt keen to recoup at least some of that investment.
Among other figures, their S-1 filing quotes Juniper Research saying "the global opportunity for home automation and security, smart metering and smart health monitoring in the home is expected to grow from $5.8 billion in 2013 to $14.9 billion in 2018, representing a compound annual growth rate of 21%. Approximately 81% of the total market size in each period is attributable to the home automation and security market."
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Our own research into the commercial security market, shows that the video surveillance sector achieving 10% growth in 2014 and that the security market as a whole is set to benefit from the paradigm shift towards the Internet of Things and ubiquitous sensors.
Precedent has already been set by Control4. The Salt Lake City-based smart home company raised $64 million in its 2013 IPO, offering some 4 million shares at its midpoint target price of $16 per share. That set the company’s overall valuation at about $400 million, far higher than its initial valuation target of $225 million in its S-1 filing with the US SEC.
It is undoubtedly a very crowded and competitive market; and they will face stiff competition from the likes of Samsung, who acquired SmartThings in 2014; and of course Google, who acquired Nest and Dropcam the same year.