In this Research Note, we examine SmartRent, a smart home technology company focused on rental housing in the U.S. Our analysis is based on their FY2022 annual results and investor presentations.
Founded in 2017, SmartRent, Inc. is an Arizona-based provider of a smart home technology platform for property owners, managers, developers, homebuilders and residents. Their products include smart access keyless entry, water leak detection, and smart thermostats/climate control. They also offer self-guided tours for prospective tenants, community and resident Wi-Fi and parking flow optimization software.
The company integrates their proprietary enterprise software with third-party smart devices and other technology interfaces. They use an open-architecture, brand-agnostic approach that allows owners, operators, and residents to manage their smart home systems through a single connected interface.
SmartRent became a public company in August 2021 with a public listing on the New York Stock Exchange when it completed a SPAC merger with Fifth Wall Acquisition Corp. The company reported $110.6 million revenues for 2021, +111% versus 2020.
The company believes SmartRent is the category leader in the enterprise smart home solutions industry. As far as competition goes in this space, SmartRent has said they have more units deployed than their competitors; as of December 31, 2022, the business had 547,196 units deployed, and 501 customers, including many of the top multifamily residential owners in the U.S. Competitors include Stratis IoT (acquired by RealPage in August 2020), Latch and Homebase.
SmartRent revenue increased by $57.2 million, or 52%, to $167.8 million for the year ended December 31, 2022. The increase in revenue resulted primarily from an increase in new units deployed during 2022 compared to 2021, an increased number of cumulative active subscriptions for their hosted services during 2022 compared to 2021, and their acquisition of SightPlan in March 2022.
2023 full-year revenue guidance is in the range of $225 million to $250 million while improvements in gross margins and operating efficiencies are leading to a path to profitability by the end of 2023.
In March 2022, SmartRent acquired SightPlan, Inc., a multifamily workflow management company, for approximately $135 million in cash. The acquisition advances SmartRent’s product roadmap and augments the breadth of cloud-based SaaS solutions for current and prospective customers, creating a comprehensive property and resident management platform. The SightPlan communications, maintenance workflow, and inspections platforms substantially extended the scope and impact of SmartRent’s IoT influence.
In December 2021, SmartRent acquired iQuue, a SaaS company founded in 2015 and headquartered in Altamonte Springs, Florida, providing a smart home and smart building technology platform for property owners, managers, and residents in the multifamily industry.
Backed by Samsung SmartThings, the iQuue technology platform is capable of integrating with any smart device. iQuue offerings include access control, door code management, managed WiFi, and professional installation. The acquisition provided SmartRent incremental exposure in the new-build multifamily market and expands SmartRent’s presence by adding 19 new customers who own or control approximately 100,000 units.
SmartRent is one of the few SPAC success stories to date in the smart buildings space. It is one to watch particularly in view of their longer-term strategy to grow beyond residential real estate to other commercial real estate asset classes, including office, hotels, retail, industrial, and self-storage.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.