CoStar To Acquire Proptech Company Matterport In $1.6B Deal
CoStar Group Inc. plans to acquire Matterport, an early developer of 3D capture technology to produce photorealistic virtual tours or “digital twins” for properties.
CoStar, which operates online property marketplaces Apartments.com, LoopNet, CoStar and Homes.com, agreed to pay Matterport shareholders $2.75 in cash and another $2.75 in CoStar stock for each share they own. This reflects about $1.6B of enterprise value, the companies announced.
CoStar Group already utilizes Matterport’s 3D virtual tours on its online property marketplaces, with almost 300,000 digital twins available. Last month, Apartments.com users viewed Matterport 3D Tours over 7.4 million times, according to Matterport. In total, Matterport has captured more than 12 million spaces throughout 177 countries.
CoStar plans to use Matterport to enhance its Homes.com platform, Matterport’s release states.
“CoStar Group and Matterport have nearly identical mission statements of digitizing the world’s real estate,” CoStar Group founder and CEO Andy Florance said in the release, adding that a Matterport tour is the new open house given that buyers often select properties without in-person visits now.
“CoStar Group intends to support and invest in research and development opportunities to further develop Matterport’s spatial technology, including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative artificial intelligence to imagine and reimagine physical spaces,” Florance said.
Matterport’s stock soared 181% this morning, bringing it to a two-year high, MarketWatch reported, using FactSet data. This was the stock’s biggest surge since it went public in February 2021, the article states.
Last year, Matterport said it planned to reduce its workforce by about 30% and also reduce its office space.
CoStar’s $5.50-per-share buyout represents a 216% premium over Matterport’s Friday closing price of $1.74, a record low, according to MarketWatch. CoStar’s shares rose 1.6% on Monday.
Matterport Chair and CEO R.J. Pittman said the transaction offers Matterport’s stockholders the opportunity to participate in value creation and future growth prospects, according to the news release.
“This transaction is another significant milestone that acknowledges the groundbreaking work Matterport has accomplished in 3D digital twin technology and AI-driven property intelligence,” Pittman said in the release. “With CoStar Group's expansive reach and scale in property research and analytics and our joint commitment to innovation, we believe that this powerful combination will transform how properties are marketed, sold, and managed worldwide.”
Matterport technology allows anyone to digitize a property using a camera, including those found on most smartphones. It also produces a line of 3D capture devices and utilizes Cortex, an artificial intelligence software engine that automatically generates 3D digital twins and virtual tours, providing details like property dimensions and room layouts, according to Matterport.
The acquisition is set to finalize this year. It comes as CoStar’s Homes.com is set to potentially benefit from the National Association of Realtors’ proposed $418M antitrust lawsuit settlement.
Since Homes.com does not sell homebuyer leads to buyer’s agents, instead providing them free to the property’s listing agent, it could be insulated from effects on buyer agents that the proposed settlement's rules impose, according to YahooFinance.
