SmartRent Will Merge with Fifth Wall SPAC in $2.2B Deal
By Chava Gourarie April 22, 2021 12:31 pm
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Smart home startup SmartRent will go public in a merger with a special purpose acquisition company sponsored by Fifth Wall, in a deal that values the company at $2.2 billion.
SmartRent, which offers a software platform for multifamily owners, will merge with Fifth Wall Acquisition Corp. I (FWAA), a $345 million SPAC raised in February, according to documents filed with the Securities and Exchange Commission.
The deal includes an additional $155 million in private investment, known as the PIPE, per the document. Participants include institutional real estate companies Lennar, Blackstone Group and Invitation Homes, The Wall Street Journal reported.
Fifth Wall, a proptech-focused venture firm, previously invested in SmartRent and currently owns less than 5 percent of the company, per the merger document. SmartRent last raised a $60 million Series C round in May of last year, with investments from Bain Capital Ventures, Amazon’s Alexa Fund and RET Ventures.
SmartRent was founded in 2017 by Lucas Haldeman, who was previously the chief technology officer at single-family rental REIT Colony American Homes. The company had devices installed in 155,000 apartments in the United States and Canada by the end of 2020, and expects to be profitable by 2022, according to an investor presentation.
SmartRent had $53 million in revenue in 2020, which it expects to more than double to $119 million in 2021, and increase up to $1.3 billion in 2024. Because it is an enterprise software platform with long-term commitments, a portion of those estimates are based on existing commitments, per the presentation.
The deal is part of the well-documented SPAC trend over the last year, which has recently cooled after the SEC indicated that it might make some regulatory changes to rein it in. Still, with so many SPACs already raised and in search of target companies to merge with, the trend is bound to continue. In February, Latch, another smart home company, announced a merger with a Tishman Speyer-sponsored SPAC in a $1.5 billion deal.
The SmartRent merger will be completed after it goes to a shareholder vote and the regulatory process is complete. Shares of FWAA closed at $10.23 Wednesday and were trading at $10.75 at the time of publication.
