Motorola Paid $297 Million For Openpath
Motorola Solutions has disclosed it paid $297 million for Openpath, the 5-year old access control startup, it announced acquiring last month.
$297 million is a significant amount for a company with such a low revenue base but investors are quite bullish on the potential of SaaS physical security.
In this note, we compare the valuation Motorola paid for Openpath to Motorola's other physical security acquisitions - Avigilon, IndigoVision, and Pelco as well as valuations for other access control companies including Latch, S2, and Avigilon's acquisition of RedCloud.
** ********'* ** ******** ****, ************* **** ****:
******** ********, * ****** ** *****-***** access ******* ********* *** $*** *******
********'* *** **********:
** ********, **'* *** **********. *** the ********* ** *** ****, **** year, *** **** ******* ******, **'* probably ***** $* ******* ** *********** revenue ** *** ****** **** ** this ****, *** **** **** ******, and **'* * ****** ********. *** having **** ****, *'* ***** ******* by **** ***********. * ***** **'* leading **** ****** ***** ***** *********** authentication, ****** *******. * **** *** products, * **** *** ************, * love *** ********** **** *** *** leadership ****.
******** ******** ** ******* ** **** any ******* ***** *** ***** ** the **** ** ********'* **********.
Revenue **** ~$** ******* *********
**** ********* **** ******** **** ******** ~$10 ******* ** ******* **** ****, based ** ********'* ********* ** "***** $5 ******* ** *********** *******", ** the **** * ******.
Valuation - *** **** *******
******** **** ~** ***** **** ********'* 2021 ******* ** ******** ** **. Compared ** *********** ******** ******** ********* (generally * ** ** *******), **** is ** ********* **** *********. *******, given *** ****** *** ****** ********* of ** *****-***** **** *******, **** is *** *** ** ****.
Burn **** - $** ** $** ******* *********
**** ********* **** ********'* **** **** for **** **** ** ** *** range ** $** ** $** *******, based ** ********'* ******* ***** ******** being * ****** ******** (******** *** ~170 ******* ****** *********** ********** ** a ****** ******* ~$* ******* *** the **** * ******).
**** **** ***** *** *********** *** early-stage **** ********* *** ** ***** expect ******** ** ******** ** ** unprofitable *** **** ***** ** ****, as **** ***** *** ********.
Comparisons ** ***** ******** ********* ************
******** ** ************* ********* **** ********'* other ******** ******** ************, ****** * much ****** ********* *** * *** earlier ***** *******. *** *******:
- ****:******** *********** ~$* *******, **** **** ******* of ~$*** ******* *** * *.** prices ** ***** *********. ******** *** ~15 ***** *** **** ********.
- ****:******** ******** $*** *******, **** **** ******* of ~$*** ** $*** ******* *** a *.** ****** ** ***** *********. Pelco ** **+ ***** ***.
- ****:******** *************** $** *******, **** **** ******* of ~$** ******* *** * *.* prices ** ***** *********. ************ ** 20+ ***** ***.
***** ********'* ******* **, ** ***, the ******** ** ***** * ************, Openpath *** **** ****** ****** ********* and * **** ********** ** ********* SaaS ******** *****.
Comparisons ** ***** ****** ******* *********
*******, ******** ** **** ****** ******* providers, ********'* ********* ** ********** ******.
*** *******, *** ******* ****** ******* deal ** *** **** **** ******** *******, ** ***** ** ******** * 55x ****** ** ***** ********* ** ~$18 ******* ** **** ******* ** going ****** ** **** **** * billion *******.
******* ******* ** ****-********** ***** ************* *** ******** **** ***** ** ***** *********, with **** $* ******* ** **** sales ****** * $*+ ******* *********. Supporting **** ********* ** ******** ****** investing $** ******* ** *****.
***** ** ***** ***********, *** ***** argue **** ******** ******** * ******** bargain *** ********** ********. ** *** other ****, *********** ****** ****** ***** whether *** ***** *** ***** **** valuations *** ***********.
***********, ******** ** *********** ****** ******* valuations, ********'* ********* ** ***** ****. For *******,** *** ******** ** *** ** 2018. ***** *** ********* ***** ******** disclosed *****, **'* ******* *** ********* at **** ** ******** ***** *** purchase ***** **** ********* ** ******** of ******** ** ******* ******** **********. On *** ******** **** *** **, they *** ****** *************, ***** ******** lacks *** ********'* ****** ****** ********* and ******-** **** ****** ********* *** greater ****-**** ********* ******.
*******,******** ******** *********** $** ******* ** **** ****** a *** ******* ** ******* ** that ****. ******** ***** ** ******** to ***** **** ****** ******* *** it ***** ****** * *********** **** of ***** ******** ** * *********** competitor ** *** ******.
Willingness ** ***** *******
**** **** ** ******** ***** *** companies *********** ** ***** ******* ** become * ******** ********** ** ******** security. ***** ************ *** ***** ******* Motorola ** **** ****** ******** *** customer *****, *** ********** ** ******** is ******* *** *** **** ****-**** potential.
******** ********* *** **** ** *****, as *** ******* ********* $*.* ******* in********* **** **** ** **** (*** results), ** **** * ~$*** ******* deal **** ** *** ********* **** the ******* **** ** ********** ** fund.
Worth **? ****** ******* **********
************, ****** ******* ********* *** *** command **** **********. **** **** ** interesting ** ******* ** ******* **** newer ********** ** ******-** **** ********* can ****** *** ****** ********* ** access ******* ******** *** *** **** will ******* ******* ******* **********.
Vote / ****
* **** ** * ********** ****** control ******* **** ** *** **** for $*** *******!! ***!
****** .... *** *** ***** *********** for ****** **** ***** ***** *****-**** entrants ** ****** ******* *** ****; are **** ***** ***********?
***********, * ***** *** ***, **********? If *** ***** ** ****** ** $80 ******* ** ** ** ** hard ** ***** * ********** ***** in **** ****** ** **** **** the ******** **** **** ****! ** you *** ****** ***** ** ** existing ****** ***** **** ** ******* profitable *** ***** ********* ****** * model **** **** ******* ********** ***** results. ** **** **** *** ***** sales ****** ** **** ** *** first * ***** *** **** ***** more **** *.* ***** **** **** so *** **** ****.
** **** * ***** ** ****** vs ****, **** ** ** ******* from*****'* **** ******, **** ****** ** **** **** $300 ******* ****** ******** ** **** a ****** ** ****:
******* * ****** ** **** ******* me ** ********** *** * ***'* think **'* ************ ** ****** ** the *** ** *** ****** ***** businesses ** ** **** ********** ** they ******.
*** ***** ** *** ****, ********’* gonna **** *** **** **** ***** insanely ****** ************.
** ***** **** ********** ** **** these ********* **** ********* ** ******* it? *** ** **** **** ********* special *****?
*** ****** ******* - ***************…
*** ***** ***** **** ** **** 300 *******, *** ***** *** * company *** ****, ****** *** **** they’re *****, *** **** ** ** it ******.
** ***** **** ********** ** **** these ********* **** ********* ** ******* it? *** ** **** **** ********* special *****?
**** **** **********, *** ********** ** primarily *** *** ******** *****. ********* think ***** ********* **** ** ******, highly **********.
**** ** *******, ****** *** ******** legal ****** *****, **'* ********** ** believe **** **** **** ********** ** extremely ********** ******* ****** **** ** paying ~$*** *** ****** *** **** forever. ****'* * *** ****** ******** for ********* **** ******* *** ******* every **** *** *** **** *****.
**** **** **********, *** ********** ** primarily *** *** ******** *****. ********* think ***** ********* **** ** ******, highly **********.
**, *** **** ***** * ******** from **** ******** * *** ******** with **** ***** *** **** *** million?
****, *** *** * *** **** start, *** ***’** *** **** ****** that **** *********/*****.
** ***** ** ******* **** *** market, ****** ** **** *****.
****’* *** *******, **** ***** *** do, *** ** *****?
**, *** **** ***** * ******** from **** ******** * *** ******** with **** ***** *** **** *** million?
**'* * *** ** ***** ********. For **** ***** *************, ** ** less *****/********* ** *** ********* (**** at * *******) **** *** ** do ** ********, **** *******, ** taking ** **** **** *** *********** has ****, ***.
**** ***** ***** **** *** ** be * *** **** *** **'* pretty ****** ***** *** ***** ************* to *** ******** **** **** ***** traction / ******** * **** *******, rather **** ***** ** **** ******* themselves.
**** **** ******** ****** ********* *** saas ** ***** **** ** **** verkada’s ****** ********. ** ******* ** a ****** ********* *** ***** ***** security ******* **** **** **** ****** do **** ***** **** **** * much **** ****** ******* ***** ***** position ****** ****** ****. * ***’* think **’* ********** *** ***** **** are *** **** ***** ***** *********** is ********* ** *** ******.
** ******* ******** **** ****** **** the **** *** ************!
*** ******* ** *** ********* ** the ****? ***** **. ****?
******, **** ** *** *** ******* or ******** ************* ** **** **** has ********* ****.
*******, ***** **** **** **** ******** details ***** *** ***** ** *** deal** *** ** **** *** ******:
*** ******* ****** ********** ***** ** a **** ***** ** $********* ** ******* *** ********* **** will ** ******** **** ** ******* service ****** ******* *****. *** *********** **** ******** *** potential *** *** ******* ** **** earn-out ******** ***** ** ********'* *********** of ******* ********* ******* **** ******* 1, **** ******* ******** **, ****.
**** **** *** ** *** **** and ********* ******** *** ******** ********** team ** ****, ***.
* ** *** **** ** ***** vs **** **** **** * *** difference ** **** **** ***** ********'* stock ** ****** ****** *** *** been ******** ********** ** *** **** 5 ***** **** *** *** ***** of *** ******** ***** ** *** now ********* *************:
* ****** ** ***** **** ***** bidders ******* ** *** *****. ******* know?
******, **** *** *** ******** ***, for ****, ***** **** **** **** a ****** ** ** ***** ******* to **** ******** **** * ***** would **** ******* ******* ********** ** even ******.
********* ********'* ***** **** ******** * combination ** ***** *** ********, *.*., Latch *** * ****** ********* *** for *** ********/***** **** ***** **** it ***** **** (**, *** **** hopefully **** ** **** ** *******).
** *** ******** **** ******** ******* invested $* *** ** ******** *** "future *********** *** *************" ** **** could **** **** ** *** ***. We *** * ******* **** ******** with ***** ******** **** ******** *** they **** ***** ******* ** *** me *** *********** ** ***** *** something *****.
*** ** **** ********* *** **** Allegion **** *** ******? ****** ******** prior ** *********** *** ********* ****** 6-8 *******?
**** * ** ********* ***** ** that ******** ***** ******* ****** ******* (not ********) ** ******** ***** ****** software *** *** *****. ** ***** to ** **** ******** ***** ***** to **** ******* ** **** ****, but *** **** ** **** ******* when ******* ***** ******* *** ******* company ** ****** *** ** ******* behemoth *** ******* ** ******* *** market **** ***-****/***-****** ****** ******* ******** and ****** ***** ** ****** ***** and ****** ****** ** *** *****? How ***** ********'* ************* ** ******** by ****, ********** ** ***** ** the **** **** ***** **** ********** be **** ********** **** ******* ****** along ** **** ****** ****** ** mature *** ********.
* ****** **** ** *** ***** end ** *** ******** ** ******** commenter ******* **** ***, *** ******** that ******** ****** *** ** **** at **** ****** *** ******* ***** on *** ***. * ******* ******** has *** **** ******* ****** ** pivot ** **** ******** ***** ** they **** **.
**** ******* ********* ** ****** ****** control **** ****** ******** ** ******* in **** *****, *.*. *** ****** on ******* ******** ***** ** ***** to **** ** ***? *** ***** any *******'* ** *** *** ***** in ****** *******? * ******'* ******** Verkada ** ** * ******** ****** in ****** ******* ** **** *****.