Bethesda’s Brivo Inc. is one of the first D.C.-area companies planning to go public this year, doing so via a special purpose acquisition company, or SPAC.
The deal will give Brivo capital to reinvest and take on other competitors in the cloud-based access-control industry, an area that’s growing as digital transformation becomes further embedded in our everyday lives — including in the buildings where we live and work in. Brivo is also planning for more office space and a big bump in hiring in 2022.
CEO and founder Steve Van Till said “access to capital” was the primary reason the company decided to go public. The SPAC deal will provide Brivo with up to $304 million, and Van Till and the rest of the executive team will stay on to lead the company following its merger with New York's Crown PropTech Acquisitions (NYSE: CPTK), which values Brivo at $808 million — creeping closer to a $1 billion valuation.
That's a massive increase from the $50 million the firm fetched in 2015 when it was acquired by Dean Drako, president and CEO of Eagle Eye Networks of Austin, Texas. Brivo has continued operating as a stand-alone company since the acquisition.
Van Till said the company also looked at private equity when it was looking at growth options, but ultimately decided against it. “It just turned out there was better access to capital at a better price with a going-public route, specifically with the SPAC merger,” he said.
Van Till sees a SPAC deal as a “faster path to market,” a sentiment shared by many company executives as the trend solidifies. The region has seen its fair share of SPAC mergers in recent years: D.C.’s FiscalNote Inc. is merging with blank-check company Duddell Street Acquisition Corp. (NASDAQ: DSAC) in a deal that’s expected to close in the first quarter of 2022. Last year, local companies like McLean’s IronNet Inc. (NYSE: IRNT) and College Park’s IonQ (NYSE: IONQ) went public through SPAC mergers.
Brivo currently counts roughly 300 employees, with about 180 in the D.C. region. It has hired 100 or so in the past year, staffing up in “every single role we have,” Van Till said. He expects to add between 100-150 people this year, growing the company by 50% or so. This year’s round of hiring would include about two dozen people in Europe and about a half-dozen in Latin America, he added. Global markets are particularly important to the firm now, with its tech being used in 42 countries around the world. “One of the expansion patterns we’ll see is a company start using our products here and want that overseas, too,” Van Till said.
The firm announced Ingo Meijer as its new regional director of its European operations earlier this month. Partner growth in Europe grew by 64% in 2021, the company said, and Meijer will oversee further expansion.
In Bethesda, its 26,000-square-foot headquarters is gaining another 6,000 square feet after the last tenants recently left the floor they shared with Brivo. Van Till is also tossing around the idea of taking on additional space in a coworking facility in Northern Virginia for employees who live nearby, as “the commute is nasty to Bethesda,” he said. Such a space would start with 10-15 people, although it’s still “speculative.”
The property technology business is changing quickly, serving as both an opportunity and a challenge for firms. Falls Church’s Kastle Systems LLC recently began partnering with Clear Secure Inc. (NYSE: YOU) to integrate vaccine and testing info into its commercial real estate building entry app.
Brivo, which serves commercial real estate customers but also multifamily housing units, has been focusing on the “insight economy,” Van Till said, including facial detection and other tools for customers to gather data about users. Late last year, Brivo introduced a feature that uses machine learning to notify clients when there’s a deviation in behavior at a building.
It also recently began partnering with Montrose, Colorado’s Proximity to integrate Brivo’s building access tools into the former’s workspace management app.
Brivo said Thursday it expects to make between $71.6 million and $72.5 million in revenue across 2021 — up from its prior expectation of $71.6 million. By 2025, it expects to generate $417 million in revenue and $290 million in annual recurring revenue, the company said in a release.
After the SPAC merger, the company will trade on the New York Stock Exchange under the ticker symbol “BRVS.” The companies expect the combined entity will begin trading in the first half of the year.
Golub Capital Credit Opportunities has agreed to lead $75 million in a convertible note to the combined company that will close concurrently with the business combination. Eagle Eye Networks is also an investor in the private investment in public equity deal. There is approximately $276 million currently held in Crown’s trust account, subject to any redemptions by Crown shareholders.
Brivo’s shareholders will retain 69% ownership at the conclusion of the deal.
Imperial Capital is acting as financial adviser and Latham & Watkins LLP is acting as legal adviser to Brivo for the deal. RBC Capital Markets LLC is acting as financial adviser and capital markets adviser to Crown PropTech, and as exclusive placement agent on the private placement. Davis Polk & Wardwell LLP is acting as legal adviser to Crown PropTech. Shearman & Sterling LLP is acting as legal adviser to RBC Capital Markets LLC.
