SmartSpace Software Plc is a UK based provider of workplace management software for smart buildings and commercial spaces. The company is listed on the London Stock Exchange’s AIM market. In this Research Note, we examine the business, based on their trading updates and investor presentation of 17 February 2022 and their workplace management strategy.
Revenue for the year ended 31 January 2022 increased 15% on the prior year to £5.3 million. The firm reported continued strong momentum of Annual Recurring Revenue (ARR), which increased 64% year on year to £4.9 million.
The three operating companies in the group comprise:
- Space Connect ‐ SaaS meeting room and desk booking vendor, acquired in October 2019, headquartered in Australia.
- SwipedOn ‐ SaaS visitor management and desk booking vendor, headquartered in Tauranga, New Zealand, founded in 2013 and acquired in October 2018.
- Anders & Kern ‐ workspace software and hardware distribution and technical support.
Since 2018, SmartSpace has revolved around its buy and build activities for its pure play SaaS business. Group strategy has shifted to focus on diversification into the self-serve and mid-range markets focusing on small to mid-size customers which can deliver fast growing recurring SaaS revenue at higher margins. As a consequence, the firm divested its Enterprise software business (£3.3 million revenues y/e 31 January 2019) to Four Winds Interactive for $4.6 million in August 2020.
SwipedOn, the visitor management and desk booking software offering is the major contributor to the business with over 4,700 customers in over 70 countries. Annual recurring revenue now accounts for 86% of group ARR, which increased by 57%, year on year, to £4.2 million. SwipedOn growth strategy is to maintain their current trajectory of increasing the number of locations using their software (currently over 7,000) with a focus on targeting large higher-value multi-location organizations and leveraging their existing customer base.
Our brand new report shows that the Global Digital Workplace market as a whole, was worth $3.7 Billion in 2021, rising to $9.21 Billion by 2026, growing at a rate of 20% CAGR. Our subscribers receive a 10% discount on this (and all) report.
Smartspace Software currently focuses its marketing spend on 5 key English-speaking markets - UK, USA, Canada, New Zealand and Australia. However, the launch of SwipedOn in South Korea is imminent with a fully localised product, marketing and support. If successful, it will act as a template for further geographic expansion in non-English speaking markets.
The other two businesses in the group reported mixed results: Annual recurring revenue for SpaceConnect increased 291% to £0.61 million in the year to 31 January 2022 driven by the continued strong progress from its reseller channels. While Anders & Kern, the UK distributor of workspace software and hardware saw a decline in revenues to £1.73 million.
Competitors to SwipedOn include:
- The well-funded US startup Envoy, which received $111 million Series C funding in January 2022.
- Belgian-based Proxyclick, acquired by Condeco Software in January 2022.
- UK competitor, SignInApp which acquired a strategic investment from PSG in September 2021.
- Canadian firm, Traction Guest, acquired by PSG in December 2021.
- UK startup, We are Forge, acquired by Yardi in June 2021.
- South African startup, WizzPass, acquired by FM:Systems in June 2021.
Clearly, consolidation in visitor management software has been intensifying, with workspace management and workplace experience taking centre stage in software for the built environment, as stated in our brand new report: Global Digital Workplace Report 2021 to 2026.
With both M&A and VC funding at an all-time high in 2021, workplace management deals accounted for a significant proportion of transactions in the smart buildings space. SmartSpace faces some tough competition as established facilities management players augment their software portfolios and growth capital from corporate stakeholders and private equity firms creates some very well-funded competitors.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.