AI-powered parking platform Metropolis today announced that it raised $1.7 billion to acquire SP Plus, a provider of parking facility management services, in a combination of equity and debt.
Eldridge Capital and 3L Capital co-led the tranche with participation from BDT & MSD Partners’ affiliated credit funds, Vista Credit Partners, Temasek, Slow Ventures and Assembly Ventures. As a part of the financing, Metropolis will take on $650 million in loans and $1.05 billion in Series C preferred stock financing.
Metropolis will pay roughly $1.5 billion for SP Plus “while retaining significant capital on its balance sheet,” Metropolis co-founder and CEO Alex Israel said in a press release. Prior to the latest fundraise, Metropolis had raised $226 million in total.
“Today, we announced a transformational acquisition that represents both a new paradigm in how technology companies grow and a significant step forward in offering consumers a remarkable experience,” Israel continued. “SP Plus is a phenomenal business whose operational excellence, talented leadership team and high customer satisfaction levels have long made it a key partner to real estate owners across North America. The combined platform will seek to bring checkout-free payment experiences to consumers.”
Israel, a serial entrepreneur who sold his last company, ParkMe, to Intrix in 2015, founded Metropolis in 2017. The company equips existing parking structures with a computer vision system that enables customers to “drive in and drive out” without having to swipe a credit card or pay with cash.
To use a Metropolis parking facility, customers have to provide their name, license plate, phone number and payment method. From an app, they can review their visit and know the price in real time. Metropolis tracks cars and automatically charges the owners, emailing the receipt after they drive out.
In SP Plus, Metropolis gains an established, publicly traded business with a massive parking footprint across the U.S. and Canada. SP Plus owns more than two million parking spaces and manages over 3,300 parking facility locations, as well as parking and shuttle bus operations at 160 airports.
Metropolis’ mobile app for managing parking payments and more. Image Credits: Metropolis
It’s another step toward vertical integration for Metropolis, whose infrastructure was powering around 600 parking facilities as of June 2022. Following its acquisition of Premier Parking last year, a Nashville-based company that operates parking garages and spaces around the U.S., and now SP Plus, Metropolis claims to have operations in more than 360 cities, millions of customers and over $4 billion in processed payments annually.
“While transforming the parking experience is our focus and priority today, as we deploy our proven technology we see opportunity to offer checkout-free transaction experiences at even more places people go,” Israel said in the press release. “From gas and electric vehicle-charging stations to drive-thrus and car washes, as well as retail stores, our computer vision platform enables people to transact in the physical world with even greater ease than we experience online.”
In recent years, Metropolis has stepped up investment on the analytics, sales and marketing side of the business, where it sees a large addressable market. For example, the startup — which recently announced a team-up with Uber to launch Uber Park — uses insights from its platform to inform staffing, pricing and maintenance at parking facilities, also partnering with local businesses like grocery stores, coffee shops and other merchants for in-app promotions.
“This transaction delivers immediate and certain value to our stockholders at a substantial premium to current and historical trading levels,” SP Plus chairman and chief executive Marc Baumann said in a statement. “We expect the transaction to offer an exciting path forward for our team members, partners, clients and consumers in the U.S. and abroad. While our technology offerings are successfully fulfilling client and market demand, with increased investment, we see the opportunity to accelerate the technology roadmap for the benefit of our clients and their customers.”
At $54 per share in cash, Metropolis’ acquisition — which will take SP Plus private — represents a 52% premium over SP Plus’ closing stock price on October 4. The transaction has been unanimously approved by Metropolis’ and SP Plus’ boards of directors and is expected to close in 2024, the companies say, subject to customary closing conditions, regulatory approvals and the approval of SP Plus’ stockholders.
It’s unclear how many of SP Plus’ approximately 20,000 team members will join Los Angeles-based Metropolis’ workforce, which totals around 2,000 employees, following the deal.