In this Research Note, we examine companies in the proptech and smart buildings space which have opted for a SPAC route to become publicly listed in 2021 and 2022 to date, based on their annual reports, investor presentations, our M&A transactions database and analysis of previous deals.
SPAC acquisitions accounted for 11 completed transactions in the smart buildings space in 2021. This year to date, a further 5 SPAC acquisitions have been announced or completed.
Tado, based in Munich is a startup provider of smart thermostats and home climate controls. The firm is set to go public on the Frankfurt Stock Exchange merging with Luxembourg based blank check company GFJ ESG Acquisition I. The deal, which will also involve an additional private investment round, is expected to value Tado at around €400 million. The company is forecasting more than €500 million in annual revenues in three years, by 2025.
London-based provider of leak prevention solutions for smart homes, Ondo announced plans to go public via a reverse takeover with a special purpose acquisition company, Spinnaker Acquisitions. Ondo's product, LeakBot is an internet of things (IoT) device that detects water leaks in buildings with its patented Thermi-Q technology. The new company was launched on the UK’s London Stock Exchange in March 2022 with the name Ondo Insurtech Plc.
In the USA, several deals involving companies offering energy efficiency, distributed energy resources software and energy storage were announced:
Voltus, a provider of a distributed energy resource software platform. The closing of the proposed business combination with Broadscale Acquisition Corp. remains on track for the second quarter of 2022. 2021 revenue was reported as $47.4 million, up 94% from 2020.
Altus Power, a U.S. clean electrification company serving its commercial, industrial, public sector and community solar customers by developing, owning and operating locally sited solar generation, energy storage, and EV charging infrastructure across 18 states. Since the close of its business combination with CBRE Acquisition Holdings in December 2021, Altus Power and CBRE’s Renewable Energy Solutions team have quickly identified a pool of CBRE clients that could immediately benefit from Altus Power’s clean energy project development expertise. Revenue of $71.8 million was reported for 2021, an increase of 59% over 2020.
Stem, the first U.S. publicly traded pure-play smart energy storage company, completed its previously announced business combination with Star Peak Energy Transition Corp in April 2021. Stem’s Athena software uses artificial intelligence and machine learning to automatically switch between battery power, onsite generation and grid power. 2021 revenue of $127.4 million was reported, up 251% year-over-year.
In the physical security systems sector, 4 SPAC deals have been announced or completed:
Latch, a US supplier of LatchOS, a full-building operating system of software, products, and services for apartment buildings and commercial office space, which merged with a SPAC subsidiary of Tishman Speyer Properties. Their current offering includes smart access, visitor and delivery management, smart device and sensor control, connectivity, personalization and services. Revenue of $41.4 million was reported for 2021, up 129% year-over-year.
SmartRent, a US provider of an enterprise smart home and smart building technology platform for property managers and residents. SmartRent provides a range of software and hardware, but places access control at the forefront of its portfolio. Revenue growth of 111% to $110.6 million was reported for 2021 as compared to $52.5 million in 2020.
On November 10, 2021, Brivo entered into a definitive merger agreement with Crown PropTech Acquisitions that will result in Brivo becoming a publicly listed company on the New York Stock Exchange in 2022. 2021 revenues are estimated at $71.6million.
Evolv Technology, US provider of a weapons detection solution, became a public company in July 2021 when it completed a SPAC merger with NewHold Investment Corp. 2021 revenue was $23.7 million, an increase of 395% compared to $4.8 million in 2020.
There has been turbulence in several SPAC companies with the replacement of Chief Financial Officers at View and Latch and the delayed SEC filing and restatement of financials at View. Regulatory issues, falling stock prices, unrealistic revenue projections and disappointing results have meant that enthusiasm for the SPAC route has waned in recent months.
Although we do not expect to see as many SPAC deals completed this year, our analysis of M&A for the first quarter of 2022 confirms that the appetite for acquisitions in the smart buildings landscape has not diminished and is in fact continuing at the high level of the previous two years.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.