Recently, the IPO (Initial Public Offering) market has become interesting to a large number of completely new investors who have not even been participants in the stock market. There is one big reason — profitability. The average return after the lock-up period is 40.5%, which corresponds to 162% annual in dollars (excluding commissions and personal income tax). In this article we will discuss the key details of Latch IPO: the history of the company, when is the Latch IPO date, Latch IPO price and everything you should know to make a decision whether to invest in it or not.
Latch is an access control and building software provider. If you have ever left the key inside the apartment, or your friend needed one and you had to drive all the way from one end of the city to bring the key, then I’m sure you’ve had a thought about a digital lock. The founders of Latch, Luke Schoenfelder, Brian Jones, and Thomas Meyerhoffer, made this idea come true.
The founders initially focused on apartment buildings. They realized the problem with losing, breaking or passing the key to someone and wanted to give tenants access to their homes via a smartphone app rather than a physical key. Now you can access the apartment through the Apple Wallet.
Latch makes three products: the M Series, a mortise lock; the R Series, an electronic reader; and the C Series, a dead bolt lock. The C Series is the only one compatible with Apple HomeKit.
Prior to Latch IPO 2021 the company raised $327 million to date from investors including Camber Creek, BlackRock Private Equity Partners, Chamath Palihapitiya, and Fidelity. This money helped the company complete other product partnerships with big companies such as Walmart’s e-commerce subsidiary, Jet.com. In 2017 Latch's products were installed in 1,000 apartment buildings in New York City.
A year later Latch announced a long-awaited partnership with the most obvious company — Airbnb. Latch devices were to be installed in the properties developed by the home sharing company Niido, powered by Airbnb (which, by the way, had an IPO just a little before Latch going public).
It is admitted that the real estate sector is still undisrupted and seeks to modernize parts that have historically been tech-averse such as title insurance, mortgage closings and construction. Investors are betting on the sector now, no wonder many have been asking “When is Latch going public?” Latch is one of the few proptech (property technology) startups that went public recently (see also Opendoor).
Let’s see how well the Latch IPO went. Latch IPO date and price details below.
Latch’s Public Listing Key Data and IPO Date
IPO Date: June 7, 2021
Stock price: $10.8
Valuation at IPO: $1.56 billion
CEO: Luke Schoenfelder
Category: EDP Stocks
Method: via SPAC
The Latch stock IPO date was June 7, 2021. The company said it raised $453 million in cash out of a $1.56 billion valuation at the public offering. The Latch IPO price grew 4% on the first day and gained almost 40% in the next two months.
The listing went through a Special Purpose Acquisition Company (SPAC) Tishman Speyer, a blank-check firm created for a merger like this. Shareholders of SPAC get a share of a promising company or can cash out during the IPO, the startup becomes publicly traded and saves on huge underwriters’ fees. It’s a win-win game here, which became very popular recently.
However, it always follows the same pattern. Shares jump on the first date and then fall in the next couple of days or weeks when the hype goes down. Now the stock is traded 20% lower than the Latch IPO price. So if you were not among the lucky early investors, just wait for a correction and buy if you believe in the business.
We discussed this in the article as well as the strategy for further steps. But let’s discuss whether Latch is appealing to buy long-term.
So What About Investing Now?
Latch claims to have booked over 300,000 units across more than 35 states. By 2019 one in ten new multifamily apartments in the United States were built with Latch.
This is quite a success for a 7-year-old company and now, following Latch IPO news, the management announced they will expand into the commercial space. This is a totally new sphere where Latch has yet to claim their leadership. In May 2021 they announced that all their products — including smart access, visitor and delivery management, smart device and sensor control, etc. — will be available to office spaces. The first ones to implement this are famous Manhattan buildings such as Empire State Building and Brookfield Place. This expansion resulted in 120% year-over-year revenue growth in Q3. Latch reported revenue of $11.2 million.
The first VC investor in Latch, Casey Berman, believes that Latch has a “market leadership not just in the hardware space but in software thanks to Latch OS."
Nevertheless, the company is still in the red and is expected to lose $101 million in 2021. If you are hesitating whether to invest in Latch after the IPO or not, think of this: how convenient is it now to enter and manage your working and personal spaces? There you will see a big problem that Latch is successfully solving.
Is Latch a public company?
Is Latch publicly traded? Yes, you can buy shares of the company. Latch had an IPO on the Nasdaq on June 7, 2021 under the ticker LTCH. It went public via merger with special purpose acquisition company (SPAC) Tishman Speyer.
How much is Latch worth?
Latch had a merger with Tishman Speyer SPAC at the valuation of $1.56 billion. As of December 3, 2021 the market cap is $1.2 billion due to the decline after Latch stock IPO.
What is Latch’s business model?
The company sells digital locks and a space management system Latch OS. It consists of 5 modules: smart access, visitor and delivery management, smart device and sensor control, connectivity, personalization and services.