The SPAC Deal: SmartRent announced a SPAC merger with Fifth Wall Acquisition valuing the company at $2.2 billion.
There are no SPAC warrants involved in the deal, which means less dilution to shareholders later on.
Founder shares are being given a three-year lockup to ensure the long-term investment in the company. Existing shareholders will have a six-month lockup on their shares. Investors in the company include Starwood Capital, Lennar, Invitation Homes, and Koch Real Estate.
Current Fifth Wall Acquisition I shareholders will own 15.9% of the new company after the merger.
About SmartRent: SmartRent is a leader in smart home technology for the global residential real estate market. The company offers an internet of things operating system for residential property owners, managers, homebuilding, home buyers, and residents. SmartRent currently offers self-guided tours, video intercom, Wi-Fi solutions, parking, and smart home products such as electricity monitoring.
The company says it has more resident units installed and states served than all its competitors combined. SmartRent has more than one million devices installed to date.
SmartRent operates in 409 cities and 42 states. The company counts 15 of the top 20 multifamily rental property companies as clients.
Growth Ahead: The company plans to leverage Fifth Wall’s investor base of international real estate owners to help with expansion in Europe, Japan, and South Asia.
New offerings are coming from SmartRent to increase revenue per unit and the company’s continued push for recurring revenue. Among them are carbon emission monitoring, water leak monitoring, lease signing, CRM, and video/security.
The company wants to get to revenue of $13 to $34 a unit monthly.
SmartRent lists a current residential opportunity of $30 billion. The market size grows to $80 billion with new product offerings and $200 billion with global expansion.
From existing customers, SmartRent has an opportunity to generate $1.5 billion in annual revenue.
Financials: SmartRent had revenue of $52 million from 155,000 units in fiscal 2020. The company is guiding for 314,000 units in fiscal 2021 and revenue of $119 million. SmartRent has 80% of fiscal 2021 and fiscal 2022 revenue booked from already committed units.
Revenue expectations are $342 million in fiscal 2022, $782 million in fiscal 2023, and $1.3 billion in fiscal 2024.
The company anticipates being EBITDA positive by 2022.
FWAA Price Action: Fifth Wall Acquisition shares are up 0.98%% to $10.33 on Thursday afternoon at publication.
This story originally appeared on Benzinga. © 2021 Benzinga.com.
Benzinga does not provide investment advice. All rights reserved.
Christopher Furlong via Getty Images