Brivo CEO Steve Van Till
Brivo Inc., a maker of security software for buildings, is going public through a merger with blank-check company Crown PropTech Acquisitions (NYSE: CPTK).
IPO Edge sat down with CEO Steve Van Till to find out more.
IPO Edge: Brivo is credited with pioneering the cloud-based access control category – can you explain your technology?
Brivo has been serving commercial customers since we launched our cloud-based access control and connected hardware solutions in 2002 and pioneered the cloud-based smart spaces category. We built the company from the ground up with the goal of providing the best technology and support to property owners, managers and tenants as they look for more from the buildings where they live, work, learn, shop, eat, worship, play – and almost anything else you could name. We recognized the cloud as the most powerful way of doing that.
Today, Brivo is the global leader in mobile, cloud-based access control and smart space platforms. Our product ecosystem and open API provide businesses with powerful digital tools to increase security automation, elevate employee and tenant experience, and improve the safety of all people and assets in the built environment. Our building access platform has grown to become the digital foundation for the largest collection of customer facilities in the world, trusted by more than 44,500 diversified commercial customer accounts occupying over 300 million square feet of secured space in over 72,000 buildings. In terms of our geographic reach, we have customers across all 50 states and in 42 countries. We also have an extensive network of 1,500 channel partners – third-party companies that provide local sales, service and installation across all classes of commercial real estate including office, industrial, multifamily and retail properties. This network is a key differentiator that creates a sustainable competitive advantage.
The full Brivo product ecosystem consists of our own Software-as-a-Service (SaaS) platform, mobile applications and connected hardware devices, plus a complementary selection of fully integrated third-party offerings such as video surveillance, smart locks, intercoms and numerous vertical software services that extend our subscriber solutions into multiple business domains. We design and build our own Brivo-branded access controllers, smart readers, touchless mobile credentials, visitor management kiosk, occupancy monitor, health and safety protocols, and data analytics dashboard. All of these products and services — both ours and third-party — are delivered as a unified user experience in our SaaS platform and mobile applications.
IPO Edge: Take us through the customer journey – where is the entry point, and how do those relationships expand over time?
Corporations and owners and operators of commercial real estate that use our technology and services include Greystar – the largest apartment management company in the U.S., Whole Foods, NTT (Nippon Telegraph and Telephone), DocuSign and Realogy. Our platform is foundational for smart spaces, providing access management, sensor monitoring, visual awareness, visitor and delivery management, and AI-driven data analytics, providing customers with all the core functionality required to operate, glean valuable insights, and optimize the performance of their buildings. Our business model is predicated on a land and expand strategy where we bring customers into our ecosystem and expand those relationships over time – key examples of this include Whole Foods and DocuSign, which are applying our technology quite differently.
In the case of DocuSign, they are largely using it the way that any commercial office tenant would use it, which is to manage space that is populated by employees – a classic office environment – as well as loading docks and other parts of the building. When you look at Whole Foods, they’re really using it more as part of a supply chain solution than a retail or an office solution, because it’s allowing people to get into the store to make things or deliver things or do their jobs. Like many of our customers, our relationship with Whole Foods started off in around five locations to try out the product, to see if it was really a fit. Now we’re serving more than half of all Whole Foods, and the relationship continues to expand. This is a perfect example of our land and expand strategy, where we have helped customers scale their systems across new use cases and properties.
IPO Edge: Why did you decide to partner with Crown PropTech Acquisitions (NYSE: CPTK) to go public?
Crown PropTech Acquisitions is led by a strong team of leaders with more than 50 years of combined experience in real estate transactions, branding assets and integrated emerging technologies, and has acquired and developed billions of dollars of high-profile commercial real estate assets. They bring a tremendous amount of direct operating experience from the customer side of our business, and that customer insight will be tremendously valuable as we shape the business going forward to better meet the needs of those constituencies.
We believe there are significant synergies between our two companies with technology adoption across Crown’s portfolio as well as the ability to leverage Crown’s extensive relationships, strategic insight and global networks. Crown can rapidly expand and scale Brivo’s reach in the B2B market and has access to leading international networks across commercial real estate investors, hospitality partners and REITs that would benefit from the adoption of Brivo’s transformational technology. We are excited about these synergies and are highly confident in the significant industrial logic for this business combination.
IPO Edge: What does your market opportunity look like, and how do you expect to retain and grow market share in this expanding sector?
There are four secular trends supporting continued growth for our business, underpinned by strong demand and adoption across attractive end markets in enterprise, commercial and multifamily. First, the PropTech boom has accentuated the value of buildings having better connected digital solutions for access management, tenant experience and sustainability. Second, there is now a clear customer preference for cloud-based building services that work as virtually all other enterprise applications do already. Cloud is now 10% to 15% of the access control market and is expected to grow 5x over the next five years. Third, channel partner cloud favorability has swung dramatically from 20% to 75% over the last five years. And finally, hybrid work patterns with employees constantly changing spaces – and what is now the new normal in health and safety – call for a higher density of robust smart space solutions.
These trends have come together to create a $70 billion total addressable market – $28 billion in products and $42 billion in SaaS. Notably, the majority of the high-margin SaaS revenue, what we estimate to be $30 billion of this opportunity, is concentrated in Brivo’s primary markets of enterprise and commercial buildings, where we are singularly positioned to capture it. Further, we are bolstered by the success of our land and expand strategy, as well as our attractive unit economics that drive highly productive and profitable customer relationships, with a compelling lifetime value to customer acquisition cost (CAC) ratio of 6.1x and – almost unheard of – a zero CAC payback period. We have also logged an industry-leading net retention of 120%.
The business combination will provide us with up to $304 million of capital to advance our mission of delivering the highest quality products and services to protect our customers and fuel growth via the expansion of sales and marketing, customer acquisition, SaaS service expansion and product development.
Jarrett Banks, Editor-at-Large