Zigbang, a South Korean proptech startup that provides real estate transactions service, announced on Thursday that it will acquire Samsung SDS’ home internet of things (IoT) unit to make a foray into the smart home industry.
Samsung SDS sells off the smart home IoT division, which is the only B2C business Samsung SDS has, in order to focus on its B2B. Its main products include digital door locks and wall pads that connect to users’ smartphones. In 2016, Samsung SDS tried to sell the smart home IoT unit to Ireland-based company Allegion but they couldn’t reach an agreement, as reported.
IoT is not an easy business because the margins are thin at best, so one player that wants to be in it for the long term is scooping up its rivals in a bid for more economies of scale.
The startup expects to create technological synergies and increase its market share by acquiring the smart home IoT business.
“By combining Zigbang’s residential contents with Samsung [SDS]’ home IoT hardware, we will revolutionize the smart home market,” CEO of Zigbang Sung-woo Ahn said in a statement.
The acquisition will enable Zigbang to enter the global smart home markets and accelerate its growth because Samsung SDS’s IoT unit is currently generating solid revenues in more than 16 countries, vice president of Zigbang Sunwoong Lyuh told TechCrunch.
The startup, which signed the acquisition agreement yesterday, aims to complete the deal in the second quarter of this year, Lyuh said. The company declined to comment on the acquisition deal valuation. The deal size is estimated at $85 million (100 billion KRW), based on media reports.
Zigbang wants to digitize everything about living space, from real estate transactions to smart home devices. The company also plans to enter the self-storage and home inspections and repairs services.
Zigbang has been on an acquisition-expansion spree since 2018.
The startup acquired HogangNoNo, a Korean proptech startup, in 2018, WooZoo, a co-living platform, and Sugarhill, a commercial brokerage platform, in 2019. It also acquired Movill, a residential management service platform, last year.
Zigbang claims a total of 33.5illion users with 8.1 million monthly active users. It currently has 600 employees.
It reached a $574.2 million (700 billion KRW) valuation in July 2019 when it raised the latest funding $132.5 million (160 billion KRW), bringing its total funding raised to date $187.7 million (226.5 billion KRW). Zigbang was valued at $908 million (1.1 trillion won) in June 2021, based on a report released yesterday by the South Korean Ministry of SMEs and startups.