Memoori smart buildings report 2

Consolidation picks up among smart building suppliers

One hundred and thirty-six startups were acquired in the last three years, which is the highest level of consolidation in the past decade, accounting for 72% of the total, according to a study by analyst Memoori.

Strategic buyers across the smart buildings landscape have continued their acquisitions strategy undeterred by the pandemic.

Indeed, 2019 and 2020 accounted for over 52% of these emerging player deals in the last 10 years, confirming the consolidation trend and increasing recognition by potential acquirers of the benefits of closer collaboration with startups through minority investments and majority stakes.

Memoori Smart Buildings Report

This M&A trend is set to continue for the next two to three years as more companies look to add IoT capabilities to their offerings and incumbents look to redefine their business models and attempt to remain competitive in the light of new market entrants.

In the crowded marketplace of smart building startups, new entrants need to differentiate themselves, either through their business model, partnerships or innovative technologies, in order to succeed. The Memoori report analyses the future for startups, recent and forthcoming IPOs and SPACs, disappearing and inactive startups as well as a summary of closed startups.

The analysis of venture capital and private equity funding has recorded the highest level of investment in startups over the last four years. Total capital invested in the global smart building space since 2012 amounts to $18.8bn.

Analyst Memoori’s new report on the smart building startup landscape has identified 665 private companies founded between 2011 and 2020 in the sector.

This number has increased 38% in two years. There was no slowdown in the number of startups receiving investment last year despite the global pandemic and ensuing recession.

Indeed, investment in startups has accelerated in a number of key areas which address building technologies mitigating the spread of coronavirus throughout commercial real estate. The research demonstrates the critical contribution that startups are making to the introduction of innovation in the smart buildings space.

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