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My manicurist, Brenda, told me Friday (18 February 2022) that she is thinking about buying Matterport, Inc. (NASDAQ: MTTR) stock, after a friend told her about how Matterport had been trading as high as $37.60 per share after going public via a SPAC deal at $10 per share and Matterport was now trading at $6.83 per share; near its low of $6.20 per share.
“I’ll invest $500. It will be fun,” Brenda told me with a smile.
(Brenda initially said the company was Matterhorn and didn’t mention the specific dollar amounts or SPAC, but that was the gist of what her friend told her.)
I could imagine that Ola Rollén, President and CEO of Stockholm, Sweden-based Hexagon AB is thinking nearly the same thing: buy Matterport now for a few billion dollars while Matterport is trading at its surprising “blue-light special” pricing.
“Our Vision: A future where data is fully and autonomously leveraged so that business, industry and humanity sustainably thrive,” writes Hexagon on its website. “Our Mission: Putting data to work to enable autonomous, connected ecosystems that boost efficiency, productively and quality for our customers.”
Aside from the lofty words, what do the two companies have in common?
The potential acquisition of Matterport by Hexagon would be strategic. Matterport could scale faster in the architecture, engineering and construction (AEC) space with the help of Hexagon. And, Hexagon would benefit from the Matterport cloud-hosted platform with Matterport Partner integrations. The two companies literally speak the same language: spatial data meets AEC.
The integration of the Leica BLK360 and Multivista are just two "small" examples. Hexagon could grow faster with the help of Matterport; particularly if Hexagon has 100 percent control of the Matterport technology and the Matterport technology road map to focus on AEC.
Matterport is great at spin (pun intended):
“Real estate is the world’s largest asset class comprising commercial, industrial, and residential properties,” says Matterport. “Worth an estimated $230 trillion, the global real estate market is more than three times the estimated value of all global equities combined. With more than four billion buildings worldwide, the built world is the largest undisrupted market with less than 1% digitized.”
Despite Matterport’s hyperbole that might lead you to believe that Matterport is the only company capable of digitizing all four billion plus buildings worldwide, The reality is that Matterport limitations include:
1. capturing spatial data of outdoor exterior building facades
2. capturing spatial data of high ceilings more than a couple stories tall
3. capturing spatial data with the Level of Detail needed for many commercial real estate spaces and AEC use cases
4. capturing spatial data of large spaces quickly
5. capturing spatial data autonomously
Leica’s recently introduced BLK2FLY (See Video Here) autonomous flying LiDAR drone and BLK ARC (See Video: paired with Boston Dynamics’ Spot: fully autonomous reality capture robot) solve all of these Matterport limitations in one of Matterport’s self proclaimed sweet-spot verticals: AEC.
The David versus Goliath story is much more interesting and compelling with the two collaborating rather than competing. Collaboration to achieve exponential growth would be much easier if Matterport was a division of Hexagon. Matterport plus Hexagon is a great example of where 1 plus 1 could equal 100: certainly at least 10. I could imagine that Matterport subscriptions – with a gross margin of 78 percent – would be an easier sell by Hexagon than Matterport in the AEC space.
Additionally, while Matterport early successes were in 3D models for residential real estate – a space that it had virtually no competition when it launched its Matterport Pro1 3D Camera in 2014, today We Get Around Network Forum (www.WGANForum.com) curates a list of 170 3D/360 virtual tour/digital twin platforms/software – many that are “good enough” to compete with Matterport for residential real estate on speed of capture (resulting in an attractive lower price for mostly self-employed, price sensitive, real estate agents).
Despite the first-class, industry-leading “walk-around” experience of a Matterport virtual tour in the residential real estate space, Matterport’s strength is spatial data – a digital moat – that will get deeper and wider with its January acquisition of Enview, Inc., to provide enterprise with deep insights and analytics of physical spaces via “scalable, artificial intelligence (AI) for 3D spatial data” using Matterport 3D spatial data for data sets.
According to the Matterport media release announcing the acquisition: “Enview’s technology performs a variety of 3D spatial operations, including object recognition, feature extraction, feature-based change detection, 2D and 3D measurement and attribution. The company’s Explore product is designed to democratize and automate the previously manual task of extracting insights from complex, sensor-fused 2D and 3D data.”
Enview’s AI technology – now Matterport’s AI technology – would be a great addition for Hexagon and its customers.
Matterport and Hexagon are completely aligned in vision and mission.
“Our legacy is sensors and software. Our future is autonomous technologies,” says the Hexagon website. “We are committed to a simple, yet powerful purpose: putting data to work to empower an autonomous future.”
These statements could have just as easily been written by Matterport for the Matterport website, as could be said of these additional paragraphs on the Hexagon website:
“Hexagon is unlike any other technology company on the planet. What sets us apart is a unique portfolio of sensor, software and autonomous solutions that together are unleashing the power of data to change the world for the better. Our focus is to continually feed a strong R&D base to drive innovation and organic growth, paired with an acquisition strategy that targets emerging and complementary groundbreaking technologies. This combination has transformed Hexagon into a frontrunner in sensors and software and positioned us to lead the autonomous revolution.”
“While we’ve always been focused on unleashing data to drive quality, productivity and efficiency, we believe data is also the key to creating sustainable solutions for our planet. Our technologies are shaping vast urban and production ecosystems to become increasingly connected and autonomous – ensuring that sustainability is something that we can scale into the future.”
Despite these misses, I am confident that Hexagon will acquire Matterport.
Hexagon has already completed 170+ acquisitions “that accelerate our innovation and increase value for our customers.” Hexagon is no stranger to strategic acquisitions to propel growth in its core businesses.
Hexagon could use Matterport’s cash to help fund the acquisition. Plus, I could imagine Hexagon’s stock price increasing its market cap to at least the amount of the acquisition or simply based on the likely combined synergies between Matterport and Hexagon.
The sun, moon and the stars have aligned for Hexagon to acquire Matterport.
This is likely a good time for Brenda to invest $500 in Matterport. Six analysis that follow Matterport think so. Perhaps Brenda will get to cash-out her investment before my next manicure.
What do you think? Will Hexagon acquire Matterport?
I think, one of the reasons why Matterport stock is currently so low, may be the developments coming from AI. Sooner or later every panorama will be "dollhouse-enabled" - also without additional 3D scan data.
On the other hand - from my personal point of view - the stock markets are a little bit short-sighted. Because we all know, that Matterport is more than the "dollhouse-3D-tour-company". MSPs can create business-solutions with Matterport. And these solutions have the Matterport standards, which make them interoperable.
But facing the competition like the one above, the current situation is very fragile for Matterport and all the business partners. Therefore I hope for Matterport, that find a save haven and will be acquired by one of the 5 Big Tech companies.
Google could really benefit from an acquisition, because their streetview product looks soooo outdated now. And Matterport could enable everyone in the world to make a better Google Streetview product with their mobile phones.
Same for Facebook, when they realise that the Metaverse cannot be a colorful "3D-low-poly-only-party" for all days. The Metaverse also needs the look of reality and could need some traces to history. And Matterport already has a very nice footprint in the documentation of history with 360 and 3D.
With their Skydio 3D Scan solution paired with its Skydio 2+ autonomous drone solutions? Seems like a good fit with Matterport. Skydio brings autonomous 3D drone scanning to Matterport. That checks two boxes that Matterport is missing (autonomous, drone capture).
@DanSmigrod Skydio is probably burning cash like Matterport.
No, I don't see another potential investor. I see Google (Alphabet) as the ideal investor, because with Matterport they could grow their streetview/maps business into the Metaverse (and into buildings). Google could immediately scale Matterports 3D business like they did with YouTube years ago.
Here is a good article from Motley Fool on Matterports current situation.
Perhaps a bigger player rolls up Skydio and Matterport beforeHexagon AB buys Matterport?
Quote:
Originally Posted by MeshImages No, I don't see another potential investor. I see Google (Alphabet) as the ideal investor, because with Matterport they could grow their streetview/maps business into the Metaverse (and into buildings). Google could immediately scale Matterports 3D business like they did with YouTube years ago.
@DanSmigrod I know some senior management at Hexagon and will reach out to find out what is happening. And they know are concerns with Matterport and all the dealings.
Maybe Hexagon can fix Matterport, as Leica dont own their customers.
