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Smart-home operating system announced Thursday that it will go public through a SPAC in a $2.2 billion deal.

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The Scottsdale, Arizona-based company is merging with Fifth Wall Acquisition Corp. I, the special purpose acquisition company created by prominent proptech venture capital firm

鈥淚t was abundantly clear to us that SmartRent has emerged as the clear category winner,鈥� of Fifth Wall said in an interview.

SmartRent makes both software and hardware to manage smart devices in multifamily communities. Property owners use SmartRent鈥檚 technology to remotely control things like thermostats and聽 lights.聽

Fifth Wall invested in SmartRent鈥檚 $60 million Series C just about a year ago. After Fifth Wall鈥檚 first SPAC went through an , the company began talking to SmartRent about merging with the blank-check company.

As for SmartRent, the company had been evaluating its options and considering a traditional IPO before it even knew Fifth Wall was forming a SPAC, CEO said in an interview. After seeing explosive growth, especially in the past year, the company considered tapping into the public markets for capital to fuel its growth.

Many SPAC sponsors out there are well-respected, some considered Wall Street legends, Haldeman said. But he didn鈥檛 necessarily see how they could strategically help the company.

But after hearing that Fifth Wall was doing a SPAC, 鈥淚t was just sort of this lightbulb moment that this is the perfect opportunity for us,鈥� Haldeman said.

Fifth Wall鈥檚 SPAC in particular stood out because it doesn鈥檛 use a warrant system. Warrants attached to most SPACs are dilutive toward shareholders, Haldeman said. The recently issued guidance that would categorize warrants as liabilities, and if it becomes law, both existing SPACs and deals in the works would have to recalculate their financials in regulatory filings for the value of warrants, .

SmartRent, which was founded in 2017, generated $53 million in revenue in 2020, and is estimated to finish 2021 with $119 million in revenue, according to an investor presentation. It鈥檚 also experienced zero percent churn with its customers — no small feat, but makes sense given that the company鈥檚 products are hardware-software hybrids. The company is expected to reach positive EBITDA by 2022, according to a statement from SmartRent.聽

鈥淲e鈥檒l look back on 2020 as incredibly trying as first … we go into occupied units and install products and we couldn鈥檛 do that,鈥� Haldeman said. 鈥淏ut it was also an incredible catalyst for digital change.鈥�

Fifth Wall is among a handful of VC firms that have formed SPACs of their own, along with , 听补苍诲 You can read more about the VC firms joining the SPAC rush here.

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