By Meghan Hall
When Matterport was first founded 10 years ago, the concept of virtual commercial property tours were not just uncommon, but frowned upon by the industry. After a decade of digital transformation for the company, combined with a wider acceptance of proptech, the stage has been set for expansion. Last week, the firm went public through a SPAC merger with Gores Holdings VI, where it hopes to continue to expand its reach after a year of rapid growth.
“The bet that we made was that there was a use case and a value proposition for Matterport in every building in the world,” explained Matterport’s CEO RJ Pittman. “If we were going to afford ourselves the opportunity of getting even remotely close to that market..we were going to need to do something much broader, much more akin to a scalable platform-type company.”
For Matterport, the goal is to digitize as many buildings as possible while making the digitization process accessible. According to Pittman, there are four billion buildings and 20 billion spaces worldwide, of which less than a percent is digitized. In all, that amounts to $230 trillion of global real estate, a massive asset class that Matterport believes it can tap.
In order to accomplish integration at such a large scale, Matterport has actively worked to refine its technology over the past decade. When it began, Matterport’s Pro2 Camera was largely used for digitizing space. Now, the technology has been modified and placed into an app–meaning that anyone with a smartphone can use Matterport’s technology. The tech can accurately create digital twins down to centimeters, or even millimeters, said Pittman.
Pittman noted, “That was the beginning of democratizing 3D capture for us and opening up of our value proposition to literally billions of customers around the world.”
Matterport’s app debuted at the beginning of 2020 and saw quick success. The company grew from about 13,000 customers to more than 330,000, signing up more customers than its previous eight years in business combined. 13 percent of Fortune 1000 companies have also signed on to use Matterport.
“It told us that we were on the right track,” said Pittman.
Believing that its business thesis was sound, Matterport then sought to go public, hoping that the additional funds would propel the firm into the public eye and encourage additional expansion. While Matterport considered traditional IPOs and additional rounds of private funding, the firm believed that a SPAC would allow for faster merging and the potential to raise additional capital.
“At the end of the day, that decision was less about SPAC and IPO and more about the Gores Group,” stated Pittman. “These guys are not only by far the market experts and most experienced in doing SPACs, but they’re also some of the sharpest investors at the intersection of real estate, the built world and technology, or proptech.”
As a result of the merger with Gores Holdings VI, Matterport has received $605 million in cash, net fees and expenses, including $310 million from Gores Holdings VI and $295 million in proceeds. Contributing investors include Tiger Global Management, LLC, Senator Investment Group, Dragoneer Investment Group, Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock, Miller Value Partners, Darlington Partners, Untitled Investments, and Lux Capital.
“Matterport’s game-changing technology is the gold standard across the industry, and they have solidified themselves as a market leader,” Alec Gores, Chief Executive Officer of The Gores Group said in a statement. “There is tremendous opportunity for growth, and we are excited to close this transaction and work closely with Matterport on its mission to make every building more valuable and accessible.”
Matterport’s growth, while exciting, has not been without its challenges. When Matterport’s technology first debuted, a camera could cost around $3,500–a sizable expense for marketing teams. Additionally, the industry was originally skeptical of such technologies, believing that the implementation of such tech would negatively impact the brokerage sector.
“Go back five, seven, 10 years ago, and the concept of a virtual tour was far more threatening and drove a much more skeptical response in the real estate industry,” noted Pittman.
Pittman continued, “Additionally, real estate budgets for promoting properties are notoriously cheap. $3500 for a camera was darn near out of the question.”
In recent years, however, the commercial real estate industry has begun to see the upside to using proptech. Matterport’s growth has also been helped greatly by the COVID-19 pandemic, which greatly limited in-person tours of spaces. In turn, the commercial real estate industry was prompted to adopt additional tech to fill vacancies.
“If there was one thing that the pandemic did for the world at large, and not just for Matterport, was that it generated and accelerated at least five years of digital transformations across many different industries in just the last six to nine months,” said Pittman.
Matterport reported a 15 percent uptick in business over the last year as a result of increased tech adoption from the pandemic. As of March 2021, revenue for the company was $26.9 million, up 108 percent year-over-year.
Now public, Matterport intends to use its new funds to expand its international presence and its outreach to enterprises businesses. The goal is to get Matterport to a place where it is like “running water for the built world,” akin to a utility, said Pittman.
“We’re at the dawn of a new era for what’s possible when buildings become data,” he said.