Building Enterprise SaaS Company Latch Gets SPAC Deal With Help From Chamath Palihapitiya

Enterprise SaaS platform Latch is going public in a SPAC deal that will accelerate growth.

The SPAC Deal: Latch is going public through a SPAC merger with TS Innovation Acquisition Corp TSIA. The Tishman Speyer-sponsored SPAC has a long-term existing collaboration with Latch.

A $190 million PIPE (private investment in public equity) is being led by investors including BlackRock and Chamath Palihapitiya.

The SPAC deal values Latch at an enterprise value of $1.56 billion and the company will get $510 million in proceeds from the deal.

About Latch: The first multifamily operating system that brings together services for building managers, residents and service providers was created by Latch.

LatchOS offers services like smart access, delivery and guest management, smart home and sensors, connectivity and resident experience.

The company integrates services from Google Nest and Honewywell and has booked over 300,000 units in 35 states.

Related Link: Investors Want A Chamath Palihapitiya ETF And They Might Get It Soon

Growth Ahead: More than one in 10 new apartments in the U.S. were built with LatchOS in 2019. Seven in 10 of the National Multifamily Housing Council largest developers are Latch customers.

There are 47 million rental homes in the United States, representing an addressable market size of $54 billion. LatchOS has market share of less than 1% of the multifamily market.

Palihapitiya had teased a SaaS investment last week. He called the new PIPE investment the “best SaaS company I’ve ever seen/invested in.”

Apartments that use Latch can increase revenue per apartment at a rate of between $200 to $500 annually. Using Latch reduces expenses by $100 to $200 per apartment per year, according to Palihapitiya.

Financials: Latch has $167 million in booked revenue for fiscal 2020, a year-over-year increase of 49%. The company has 0% customer churn giving it a 100%% gross retention rate.

The company is estimating revenue to hit $600 million in fiscal 2024. Revenue is estimated to grow at a compounded annual growth rate of 101.6% from 2020 to 2024.

TSIA Price Action: Shares of TS Innovation Acquisition are up 82% to $18.87. Shares traded over $26 in early pre-market trading.