Tishman Speyer to Take Latch Public in SPAC Deal
Latch, a smart building startup, will go public via a merger with a special purpose acquisition company (SPAC) sponsored by landlord and developer Tishman Speyer.
The deal values Latch, which specializes in smart locks and keyless entry, at $1.56 billion, The Wall Street Journal first reported.
Tishman launched the $300 million SPAC, called TS Innovation Acquisition Corp., in November, with a plan to target companies focused on real estate technology for a merger. Once a SPAC is launched, the sponsor generally has a six-month window to merge with the target company of its choice.
Latch, which was founded in 2014, is expected to receive a total of $450 million in cash from the SPAC and additional investors. Tishman will receive a 4 percent fee, roughly $60 million for sponsoring the deal, per WSJ.
Latch is installed in 300,000 homes in 35 states, including some in Tishman Speyer’s portfolio, according to MarketWatch.
That’s less than 1 percent of the nation’s rental stock, leaving Latch plenty of room to grow, Latch CEO Luke Schoenfelder told WSJ. The pandemic helped spur sales in 2020, Schoenfelder said, leading to revenue of $18 million for the year, up from $15 million in 2019.
Tishman’s move is part of a larger trend, in which startups are opting to bypass the initial public offering process and go public via SPACs, and it’s not the only real estate firm to have jumped on the bandwagon. CBRE (CBRE) Group launched its first vehicle in December, while Starwood (STWD) Capital Group Founder Barry Sternlicht has launched several.
Other real estate technology firms that have gone public via this method include online real estate sales platform Opendoor, home services platform Porch.com, and smart glass maker View.