Latch Inc · OTC:LTCH
Latch — TS Innovation Acquisitions — SPAC Merger (March 2021)
72 slides from Latch's SPAC merger presentation, Mar 31, 2021
Slide 1: Latch
se LATCH — && ssnmanseeves LATCH
Slide 2: Disclaimer and forward-looking statements
This presentation (this “Presentation”) is provided for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a potential business combination between Latch, Inc. (“Latch”) and TS Innovation Acquisitions Corp. (“TSIA”) and relat
Slide 3: Participants in Solicitation; industry data; non-GAAP
Participants in Solicitation. TSIA and Latch and their respective directors and officers may be deemed to be participants in the solicitation of proxies from TSIA’s stockholders in connection with the Proposed Business Combination. Information about TSIA’s directors and executive officers and their
Slide 4: Today's Agenda
Today’s Agenda Rob Speyer, President & CEO, Tishman Speyer Luke Schoenfelder, Co-founder, CEO AvalonBay Customer Story Dhruva Rajendra, Co-founder, CPO Break Prometheus Real Estate Group Fireside Ali Hussain, COO Core Redevelopment Fireside Garth Mitchell, CFO Break Catalyst Innovation Lab Fireside
Slide 5: Rob Speyer, President & CEO, Tishman Speyer
Rob Speyer President & Chief Executive Officer, Tishman Speyer
Slide 6: Pro Forma Ownership: Latch - A Unique and Compelling Opportunity
Pro Forma Ownership Latch - A Unique and Compelling Opportunity. (1) Assumes no redemptions and $40M in estimated transaction expenses. (2) Pro forma cash balance calculated as Latch’s estimated cash balance of $60M as of 4Q20 plus net transaction proceeds of $450M. (3) Does not add up to 100% due t
Slide 7: Tishman Speyer - a Global Leader in Real Estate
(1) Gross market value, includes assets where Tishman Speyer provides property management services as of 9/30/20 (2) Includes assets where Tishman Speyer provides property management services, excludes undeveloped land as of 9/30/20 (3) Tishman Speyer non-union employee count as of 9/30/20 Tishman S
Slide 8: TSIA - Harnessing Technology in a Changing Real Estate Landscape
Pier 4 Tishman Speyer’s Pier 4 – Boston Enabled by Latch M Series & R Series TSIA – Harnessing Technology in a Changing Real Estate Landscape. Technology Driving Change in Real Estate With rapid changes in technology, customers are looking for more from the buildings they live, work, and play in. Ne
Slide 9: Latch – A Perfect Match for TSIA
Latch – A Perfect Match for TSIA. Proven Product & Strong Management Team Tishman Speyer is a Latch customer and investor, and has long believed in the best-in-class, differentiated product and team. Tishman Speyer believes in Latch’s vision to create a more seamless, highly customer-oriented reside
Slide 10: Strategic Partnership With A Global Real Estate Platform To Support Growth
Strategic Partnership With A Global Real Estate Platform To Support Growth. The proposed merger will provide the growth capital for Latch to accelerate product and market expansion and further accelerate bookings, with Tishman Speyer as a strategic partner. TSIA is excited to be a partner for Latch
Slide 11: Latch
LATCH
Slide 12: Luke Schoenfelder, Chief Executive Officer & Co-Founder
Luke Schoenfelder Chief Executive Officer & Co-Founder
Slide 13: Latch management team
Thomas Meyerhoffer CDO & Cofounder Ali Hussain COO Brian Jones CTO & Cofounder Garth Mitchell CFO Euan Abraham SVP Engineering Orla Lucey SVP Supply Chain Peter Weiss CREO David Austin SVP Product Partnerships The Latch team has been dedicated to our mission since 2014. Dhruva Rajendra CPO & Cofound
Slide 14: Latch makes spaces better places to live, work, and visit
Latch makes spaces better places to live, work, and visit.
Slide 15: Opportunity to become the singular software interface for spaces
We have the opportunity to become the singular software interface for how people interact with each of their spaces.
Slide 16: Building hand in hand with the largest real estate operators
And we’re building everything hand in hand with the largest real estate operators in the world, solving their problems at each step along the way.
Slide 17: LatchOS SaaS modules for each building
Over the past 7 years, we’ve methodically developed and deployed LatchOS SaaS modules to provide the critical capabilities for each building. Source: (1) 2021 Latch Internal MSP Pricing -includes current products and services as of Q1 2021 and does not include connectivity and resident experience of
Slide 18: Real estate owners use LatchOS to drive net operating income
(1) Source: Latch estimates. Depends on average rent, future upsells, and on-site staff Real estate owners use LatchOS to drive net operating income at their properties and portfolios. $$ Increasing revenue. Up to $200-500 per apt per year(1) $$ Reducing expenses. Up to $100-300 per apt per year(1)
Slide 19: Latch Product Universe
Software Services Devices Service Orders Payments Comms Package Room (1) Latch Internal data (2) Includes launched and upcoming products and services on the near term roadmap.. Latch Product Universe(2) LatchOS Latch Services Latch Devices Always evolving, we believe that we have the most complete p
Slide 20: Meeting complex regulatory and infrastructure requirements
And we’ve done it without cutting corners, meeting the complex environmental, legal, regulatory, and critical infrastructure requirements of multi-family environments. Real time Internet Independence Hardwired Power Independence Security and privacy at the core
Slide 21: Resident app engagement and roadmap
Source: Internal Company Analytics data (1) Based on 2020 average usage data (2) Planned roadmap items - not launched for customers today. Once building owners choose Latch, we become a part of each resident’s day. The average resident interacts with our app 4.6x a day (1). Unlocking Smart Home Acce
Slide 22: Net Bookings Expansion
Net Bookings Expansion (1)-(4) Latch internal data (3) Booked ARR reflects value of annual recurring revenue from Latch software subscriptions that are under a signed LOI and will deliver within 24 months. 100% Latch has never lost a customer and continues to grow revenue with current customers. We’
Slide 23: Independent product-driven company going public
We’ve always believed that this market could be best served by an independent, product-driven, company. Source: Latch Internal Strategy We’re reaching a true market inflection point and are going public to deliver growth across new products and verticals for years to come. Tishman Speyer accelerates
Slide 24: AvalonBay x Latch
AvalonBay x Latch Karen Hollinger, Senior Vice President, Avalon Bay Peter Weiss, Chief Real Estate Officer, Latch
Slide 25: Dhruva Rajendra, Chief Product Officer & Co-Founder
Dhruva Rajendra Chief Product Officer & Co-Founder
Slide 26: Recurring revenue software business model
Our focus has always been on making buildings better places to live, work, and visit, and our recurring revenue software business model monetizes the recurring value we deliver.
Slide 27: Serve enterprise customers, onboard residents, monetize features
Serve enterprise customers. Onboard residents with a great experience. Monetize new enterprise and resident features.
Slide 28: Latch versus traditional vendors
The landscape for building owners to navigate is simultaneously limited and fragmented. Simple Sale One single Vendor. Straightforward Billing One Contract. Unified Management One Interface for Property Managers. Great Resident Experience One single interface for key resident facing interactions(1).
Slide 29: LatchOS common platform for each building
LatchOS is the common platform for each building and we scale our modules to meet the needs of each customer. Source: (1) 2021 Latch Internal MSP Pricing -includes current products and services as of Q1 2021 and does not include connectivity and resident experience offering (2) Q1 2019 to Q4 2020 cu
Slide 30: Increase in Average Revenue per Home Unit
Increase in Average Revenue per Home Unit (ARPHU) Rapid adoption of additional LatchOS modules validates Latch’s product expansion strategy. 4Q20 44% ARPHU increase 30% Percentage of Booked Home Units sold with Intercom or Smart Home LatchOS software modules 44%(1) of our 4Q20 Booked Home Units were
Slide 31: Patented access system as foundation
We started with our patented access system because it’s the common foundation for each stakeholder at a building. We believe our combined hardware, firmware, and software access system has the highest resilience and capabilities of any set of products on the market. Every door can be managed at the
Slide 32: Widening the access moat with new products
And we’re widening our access moat substantially with new products and programs.
Slide 33: The Latch C2 smart lock
The Latch C2 is one of the most affordable, versatile, and advanced smart lock ever delivered for apartments. Patent pending turn mechanism makes operations smooth even for older doors. Wireless charging ensures unprecedented reliability. Three piece design makes retrofits easy.
Slide 34: Latch Lens program
The Latch Lens program enables traditional lock manufacturers to create locks for markets that we don’t currently serve, driving new LatchOS revenue and market expansion.
Slide 35: Full-building NFC support for Android
We are one of the first companies to deliver full-building NFC support for Android devices, enabling faster and more reliable unlocks and deepening our integrations with Google.
Slide 36: But access has always been just the foundation
But access has always been just the foundation.
Slide 37: Package delivery infrastructure
Latch’s critical infrastructure ensures packages get delivered every time, through direct partnerships with carriers like UPS, remote enablement through the Latch Delivery Assistant, and software tools for each user.
Slide 38: Smart home integrations and sensors
Our integrations with companies like Google Nest, ecobee, and Jasco ensure an amazing smart home experience, while we enable new business models through leak detectors and other sensors.
Slide 39: New tools for residents
Given our app engagement, we’re excited to offer new tools for residents to have an even smoother experience at each LatchOS-powered property, driving new opportunities for growth and expansion.
Slide 40: ARPHU growth with extended product suite
From our starting point in smart access we are on track to increase our ARPHU by 57% with our extended product suite of Smart Access, Intercom and Smart Home LatchOS modules. With additional products that are on our near-term roadmap and product launches in 2021 we have the potential to add another
Slide 41: ~$54B annual U.S. market
U.S. residential rental owners and operators alone represent a ~$54B annual market. The 93M apartments in Europe add an incremental ~$90B annual market opportunity. Source: Estimations from a global consulting firm and internal Latch data. Note: TAM only includes products in current financial model
Slide 42: European expansion opportunity
Beyond the North American core market, Latch has the opportunity to accelerate a European expansion with TSIA. We can address another 93M(1) apartments through an expansion into European markets - representing $90B+(2) in annual TAM. Our strategy is to start with a focused approach on the 23.5M(3) a
Slide 43: Expansion into commercial office
Our smart access system is able to serve all doors in a building – from garage to unit entrance – and could solve a lot of the key access problems in large office buildings. Partnering with just our existing and adjacent customers, we believe we could make a compelling move into commercial office. W
Slide 44: Latch as a product company
As a product company, Latch will always deliver new products, features, and innovations for our customers and stakeholders, adapting to the market of today and tomorrow. We’re just getting started.
Slide 45: Prometheus Real Estate Group x Latch
Prometheus Real Estate Group x Latch Tony DeShaw, VP of Facilities and Maintenance, Prometheus Peter Weiss, Chief Real Estate Officer, Latch
Slide 46: Ali Hussain, Chief Operating Officer
Ali Hussain Chief Operating Officer
Slide 47: Robust traction to date
Source: Latch Internal Data, Latch 2018-2020 Financials; (1) FY 2020; (2) Q1 2019 to Q4 2020 cumulative weighted average on Booked Units; (3) Q4’20 y/y; (4) Bookings represent written but non-binding LOIs from our customers to purchase Latch hardware products and software services, not reflecting di
Slide 48: Latch works with real estate developers large and small
Latch works with real estate developers - large and small. Latch has a diverse customer group ranging from the largest real estate companies in the world(1) to dedicated and passionate local owners. Latch products are installed in 35+ states(1), from affordable housing in Baltimore, to historic buil
Slide 49: Direct relationships with real estate owners
To best serve our customers, we have built direct relationships with real estate owners since the beginning, and believe it is a key part of our differentiation. As a result, we have built a first of its kind direct account-based selling motion, which enables us to speak directly to customers, and d
Slide 50: Account-based sales coverage
Our selling professionals are assigned to specific accounts and incentivized to grow with their accounts. Each rep is assigned Key, National, or SMB accounts, with larger more complex accounts getting more focused, dedicated coverage. This structurally incentivizes our selling professionals to learn
Slide 51: Installers and service provider partners
Though we’ve taken a different approach to working with customers, we’ve also developed working relationships with the industry’s best installers and service providers. This has allowed us operational lift including the critical installation and in-field support for us to scale without a ton of over
Slide 52: Sales cycle and prepaid software contracts
This not only enables us to upsell and provide more value for the customer, it also creates high revenue visibility. Our strong, direct relationships with the customers also help facilitate repeat purchases and future upsells. Latch talks to customers early in their construction or renovation proces
Slide 53: Expanding product ecosystem differentiates LatchOS
Software Services Devices Service Orders Payments Comms Package Room (1) Latch Internal data (2) Includes launched and upcoming products and services on the near term roadmap.. Latch Product Universe(2) LatchOS Latch Services Latch Devices As the product ecosystem expands, we further differentiate L
Slide 54: Growth in a pandemic year
(1) Latch internal data In a pandemic year, which we ended with fewer selling professionals than the year before, we still continued to grow.(1) COVID-19 accelerated digital transformation efforts across all industries, real estate included. 2020 was a challenging year, which required us to make tou
Slide 55: New revenue team leaders
We’ve recently added world class leaders to our revenue team. Chris Lee Noelle Uglesic Rob Stanger Adam Sold Chief Revenue Officer VP Revenue Strategy VP Revenue Operations & GTM Strategy GM - Channel and Alliances
Slide 56: Sales and revenue organization
Our organization is ready to scale our sales and revenue operations. Chief Revenue Officer US Sales International Sales Channel and Alliances Operations and Execution GM - Canada US Key Accounts East Region West Region Central Region Channel Program Enablement
Slide 57: Demand surge and sales outlook
Though we have already seen demand surge in the last few quarters, our added investment in revenue leadership and multiple-building deals in pipeline make us extremely bullish on our sales outcomes, which we expect to become increasingly clear as the pandemic further fades and our new sales infrastr
Slide 58: Core Redevelopment x Latch
Core Redevelopment x Latch Gavin Railing, Regional Property Manager, Core Redevelopment Peter Weiss, Chief Real Estate Officer, Latch
Slide 59: Garth Mitchell, Chief Financial Officer
Garth Mitchell Chief Financial Officer
Slide 60: Key takeaways
Strong financial foundation and unit economics position Latch for sustained efficient growth. Large and growing market opportunity with multiple reinforcing growth vectors and increasing efficiency. Strong post-merger balance sheet with several organic and inorganic opportunities to extend market le
Slide 61: Annual Historical Financial Results
Annual Historical Financial Results(1) Source: Latch 2018 to 2020 Financials (1) 2018 is unaudited results (2) Booked ARR is defined as the cumulative value of annual recurring revenue from Latch software subscriptions that are under a signed LOI (3) Net revenue is net of HW and SW promotional disco
Slide 62: Recurring enterprise software solution LTV / CAC
Source: Latch internal data Our recurring enterprise software solution is highly profitable and sticky. Even if we include hardware losses - which we view as an investment cost to acquire these sticky software contracts - we have an attractive LTV / CAC of 4.0x. Design, sourcing, and manufacturing e
Slide 63: Customers prepay software contracts; Day 1 unit economics
97% of our customers elect to prepay their full 6yr+ software contract value upfront on Day 1. This creates highly attractive upfront profitability and cash efficiencies, giving us significant flexibility to price our hardware to accelerate market share gains. For our end market, upfront payment is
Slide 64: Investment in Research and Development
43% of 2020 Operating Expenses were invested in Research and Development. These investments drive sustained product differentiation and funded the development of our planned 2020 and 2021 new product releases. Source: Latch 2018-2020 financials
Slide 65: Financial projections 2020A-2025E
Innovative enterprise technology company, with large and growing market opportunity, and multiple reinforcing growth vectors. Source: Latch 2020 Financial Results and 2021-2025 Financial Projections (1) Booked ARR is defined as the cumulative value of annual recurring revenue from Latch software sub
Slide 66: Reinforcing growth vectors
Reinforcing growth vectors. Unit growth Revenue per unit growth Selling deeper into customer portfolios Signing new customers New verticals and geographies Per unit hardware revenue growth Per unit recurring revenue growth
Slide 67: Increasing efficiency
Optimized distribution for better service and improved contribution margin Increasing efficiency. Efficiencies drive increased profitability and share gains Design, sourcing, and manufacturing efficiencies Larger bundles increase value delivery and profitability
Slide 68: Detailed Transaction Overview
Pro forma ownership @ $10.00 per share(4) Proposed transaction terms $450M net cash proceeds inclusive of PIPE proceeds and transaction expenses(1) $190M of PIPE commitments before transaction announcement Detailed Transaction Overview Existing Latch Rollover Equity 64% TSIA Public Shares 19% TSIA S
Slide 69: Catalyst Innovation Lab x Latch
Catalyst Innovation Lab x Latch Stephanie Fuhrman, Head of Innovation, Catalyst Peter Weiss, Chief Real Estate Officer, Latch
Slide 70: Management Q&A
Management Q&A ATCH Latch Confidential, © Latch, Ine.
Slide 71: Appendix
Appendix LATCH Latch Confidential, © Latch, Ine.
Slide 72: Additional Information and Where to Find It; Non-GAAP Reconciliations
Source: Latch 2018-2019 Financials ($ in millions) 2018A 2019A 2020A Net loss ($25) ($50) ($66) Depreciation and Amortization 0 1 1 Interest Expense (Income) 0 0 3 Income tax provision (benefit) 0 0 0 EBITDA ($25) ($50) ($61) Adjustments: Loss on Extinguishment of Debt $1 $1 $0 Loss (Gain) on FV of
TS Innovation Acquisitions — SPAC Merger (March 2021) on 6ix