Letter from the Editor
Some normalcy has returned, and we are hoping for more in the coming months. Our first business trip took place this past month (and, in general, it was just like the "old times"). Moreover, later this year there are a few great conferences on the calendar, from Realcomm in November to a promising inaugural event from Blueprint in October. We'll be attending and hope to see you at one or the other (or both).
Our roster of projects continues to grow, including work with new clients and old. Our project breadth continues to include engagements with large enterprises, startups, investors and acquirers. There's a lot of interest in this industry, as we dig into below.
If you are trying to get through the newsletter quickly, here are a few high level takeaways:
- Continued activity on the M+A front, with new funds being announced too. The smart buildings industry continues to have the wind at its back. The 'SPAC attack' of early 2021 has slowed down though.
- We've slowed down our coverage of the back to the office news, first, because it is fairly ubiquitous, and second, it's just a bit less exciting than earlier in the year. But, overall, offices seem poised for a rebound this summer or shortly thereafter. The messy part may be figuring out hybrid work. There may also be some hiccups as employees are called back to the office - but this is less of an issue for tech to solve.
- See "Startup News and Views" for a new post on fundraising considerations for startups.
We didn't publish any new articles but are planning to spend some time over the summer catching up on writing. Joe was interviewed on a podcast. Also, Joe participated in a panel at the Verge Electrify conference. A number of key topics discussed were discussed - we highlighted that Covid preparedness could drive an upgrade cycle that includes a move to electrification, building electrification will look different for different asset classes (and sizes of buildings) and some of the foundational benefits of moving to a fully- or majority-electric building. Please reach out if you want to hear more about what we discussed.
And, never worry about reaching out to have a chat or talk about a potential project - busy or not, we'd be happy to talk! Please reach out if you want to chat!
Aamidor Consulting Market Resources. We've been tracking all the key industry partnerships and M+A activity, all available on this readily available site.
As always, we look forward to hearing from you about how we might help with your product and market strategy needs. We also hope you enjoy this issue of Smart Building Insight.
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About Our Firm
Aamidor Consulting works with software and technology vendors, investors, and building owners/operators to help them understand the smart building landscape and formulate product and market strategy. See these project summaries and detailed testimonials from some of our clients that exemplify the strategic value we provide. Our work usually falls into one of these categories:
- Fractional product management for smart building software and solutions. If your firm is not able to hire a full time PM, we can provide that same benefit on a variable cost basis.
- Strategic advisory relationships with small and large firms, helping them adapt to the changing technology landscape. We routinely work with small firms and strategy/innovation teams at the largest of organizations.
- Working with investors to identify opportunities in the market and conduct commercial due diligence of potential deals. We have worked with leading VC and PE firms, in addition to technology firms acquiring startups.
Please reach out if you want to learn more. You can work with us in a variety of ways:
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Investment News
- New funding rounds and investments:
- BuildingsIOT, a master systems integrator which recently bought analytics platform Kodaro, raised $10M from Keyframe Capital.
- Encycle, which makes a cloud-based energy management solution for small commercial, which is delivered via a smart thermostat, raised $7.5M from Cycle Capital, and others, including Turntide (smart motor OEM which recently bought Riptide.
- Smart building firm Cortex raised a $6M series A from 4490 Ventures and others.
- DR player Voltus raised $31M in Series C financing from Activate Capital along with existing investors. This round brings their total funding to $65M.
- Industrial energy efficiency player Ndustrial raised $6M from Engie and other firms.
- IOT sensing and communications platform provider Infisense raised an early round from FreshTracks Capital.
- Our friends at SpaceOS raised a 5M euro round.
- Also in Europe, autonomous HVAC firm Dabble raises $4.4M from Target Global and other Europe-based investors and angels.
- Indirectly relevant to our industry, but Workrise (formerly RigUp), raised $300M at a $2.9B valuation.
- Lincoln Property Company has made an investment in tenant amenity platform Equiem.
- News on VCs and funds:
- Acquisitions:
- Albireo Energy has expanded into the UK, purchasing Chartwell Controls.
- Industrious is buying Breather's listings platform and intellectual property. Breather's flexible office business folded last year.
- It's a bit tangential, but Microsoft has acquired IoT security firm ReFirm Labs. In light of the investments Microsoft has made with Azure for smart buildings and smart infrastructure, this is interesting.
- As we've shared over the past few months, here are some updates around relevant SPACs (note: generally the pace here has slowed significantly):
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Industry Resources
Aamidor Consulting offers a few up-to-date resources to help smart building stakeholders monitor the market:
See our homepage to learn more about our the full breadth of our offerings.
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Startup News and Views
Aamidor Consulting continues to provide insight to smart building innovators in this new section. In the coming months, we plan to include other sections with deep industry analysis, too.
If you've read this newsletter consistently over the past few months, you've noticed that there is a lot of money flowing into proptech, in addition to cleantech. That means that smart building tech, which lives at this intersection, is also attracting significant amounts of capital. Proptech funding in 2020 was down from 2019, but still very high compared to past years. Cleantech venture capital also has started to grow significantly again, especially in real estate.
There are many reasons that the proptech market has surged since the pandemic began, such as forced adoption, greater familiarity and comfort with technology, and increasingly mature companies that have proven their value. On the cleantech front, Fifth Wall's climate-proptech fund leader, Greg Smithies, notes "If we're going to hit any of the dates out there like 2030 or 2050 to be carbon neutral, you need to be investing between $2 and $5 trillion every year in retrofitting buildings with climate tech."
For startups not actively considering an imminent fundraising effort, the current environment should at least cause you to think more about near-term plans, and if there may be a compelling narrative that you can tell to potential investors.
Most proptech markets are fairly immature, with no clear-cut winner. But, those firms that raise more money may be positioned to out-grow their peers, even startups with more compelling products. We typically recommend a reserved and conservative approach when it comes to raising money (especially when advising our startup clients), however, if it appears that an arms race is brewing, raising more money may just be a necessary step to remain competitive.
There's another tailwind: commercial real estate will be reopening in the coming months, which may drive more spending on technologies to manage open floor plans and remote/hybrid workers, air filtration and healthy buildings, in addition to a general focus on more flexible operations (from operational systems to the guest experience itself). For firms that are looking for commercial momentum as they raise more funding, this may be an opportune time.
Action item: Proptech and cleantech appear flush with capital, which early-stage innovators should not merely ignore. At the very least, firms looking to raise another round in the next 12-18 months should consider if it may be advantageous to bring that fundraising effort forward. This is especially true if core competitors are well capitalized, the specific market is unsettled, and buyers still have many vendor options.
Aamidor Consulting supports startups throughout their journey in the industry, from the early stages of customer discovery to being on a rapid growth trajectory. See our startup services and past projects for more details on how we can help.
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Noteworthy Articles, Reports and News
- Return to the office: Earlier than some might have anticipated (and driven by a very successful domestic vaccine campaign), it appears that some normalization is occurring in the office sector.
- The Department of Energy has been getting very serious about a variety of emerging trends and opportunities for innovation. They just published a national roadmap for Grid-interactive Efficient Buildings (GEBs, still not a great acronym but a great idea!). Related, the new E3 initiative has a number of interesting programs - all recently announced.
- Our friends at Memoori published a new report on AI and ML in commercial real estate. Memoori tends to have a fairly complete view of the market - the graphic is quite expansive. We'd only suggest that this include another dimension - hardware, software, services - to add more detail.
- We're avid readers of the Climate Tech VC newsletter, and a recent issue covered HVAC innovators. There's a number of interesting developments on this front, a market we're watching very closely.
- It's not directly related to our industry, but The Economist wrote about an expected CapEx boom, which could certainly support the buildings industry, too. And, here is the Morgan Stanley podcast that highlights these trends.
- We just came across this report from the beginning of 2021. PERE published a good report on proptech.
- Sustainability in focus, as it relates to real estate:
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