Matterport: Spatial Data Leader and Real Estate Lockdown Savior?
The pandemic has taken Matterport from a niche product to a necessary tool for Real Estate companies across the world.
If you are in the stage of your life where scrolling through Redfin or Zillow has become your pandemic pastime, then you have likely taken a virtual tour created using Matterport. The company is one example of a digital winner in the pandemic. They have seen their revenue double in the past year.[1]
Matterport is a media technology company and industry leader in 3D capture and spatial data. The company was initially formed in 2011 as a manufacturer of 3D cameras to digitize the built world. It has since transitioned into a SaaS company that is building the fastest growing spatial data platform in its industry. Matterport makes 3D models of real-world spaces easy to create, understand, and distribute online through an immersive cloud-based platform.
Prior to the pandemic, Matterport was already transforming our relationship to physical space. However, when the first wave of lockdowns arrived in March of 2020, the company saw usage of their platform grow 157% in a matter of months[2]. The ability to tour a home virtually, while not a new technology, has transformed Matterport from a niche product to a key contributor of home sales during the pandemic. A digital twin has proven that agents win more listings, sell properties faster and earn higher commissions[3]. Recently, a foreign buyer paid $7.4m for a home in London after only a Matterport 3D tour[4].
However, Matterport hasn’t benefited passively and simply because of the nature of the pandemic. They have made strategic decisions in the short run that ultimately have created increased value for their products. They saw how the company could have a much larger impact on real estate sales from both the individual realtor to the enterprise company. To target enterprise companies, they quickly created a new, fully managed service to bring in partners in brokerage and property management. Matterport entered into global agreements for “capture services” with major players such as Cushman & Wakefield, Colliers International, JLL, and Engel & Völkers Americas.[5]
The real power of Matterport however is not solely in-home sales and leasing. They see themselves as a platform that allows users to realize the full potential of a space at every stage of its lifecycle. [6] This includes planning, construction, appraisal, restoration, marketing, and operations. Turning buildings into data and harvesting insights has the potential to create enormous value. To unlock that value, Matterport first shifted to a subscription-based service model in 2019 to take advantage of a growing user base and an increase in the number of 3D models created. To grow subscriptions though, they have worked to simplify the user experience dramatically for stakeholders through investments in cloud-technology and by developing an AI system that supports the creation of digital twins quickly and with little effort. In 2020 alone they added 12 new patents to continue pushing their offerings and spatial analysis features.[7] Another key component of their subscription and simplification strategy was the creation of an iPhone and iPad app capable of scanning spaces for upload to the platform. At the onset of the pandemic the company made the decision to release the free app 6 months earlier than planned. The early release was intended to put the software in the hands of more people faster and with little friction.
Ultimately Matterport has capitalized on the pandemic in ways that have allowed the company to scoop up more users and scale dramatically as a first mover in the industry. Bringing users onto the platform early will help solidify their advantage. As more phones begin to have the cameras necessary to 3D scan space, the source images will continue to flood in. Even as the pandemic winds down the company is positioned well to continue creating and capturing value. A newly released API and SDK will further build out the spatial applications in residential real estate, commercial leasing, and beyond to architecture, engineering, construction, insurance, travel, hospitality, and facilities management. Matterport is building the platform necessary to unlock value through spatial data and services previously not possible.
[1] Ari Levy, “Housing market skirts coronavirus crisis as sellers use 3D virtual tours to find eager buyers,” CNBC, Aug 9, 2020, https://www.cnbc.com/2020/08/09/housing-market-skirts-crisis-with-help-of-zillow-matterport-3d-tours.html, accessed Feb 2021.
[2] Ibid.
[3] News Bites – Private Companies, “Matterport Inc: Cushman & Wakefield and Matterport Enter into Global Agreement Accelerating Virtual Commercial Property Marketing,” News Bites Pty Ltd, 2020, ABI/INFORM via ProQuest, accessed February 2021.
[4] The Economist, “Crucible of creative disruption,” 2020, EMIS, a Euromoney Institutional Investor Company, Accessed February 2021.
[5] “Global Real Estate Brands Adopt Matterport Capture Services to Accelerate Property Sales and Tenancy,” press release, July 1, 2020, PR Newswire, https://www.prnewswire.com/news-releases/global-real-estate-brands-adopt-matterport-capture-services-to-accelerate-property-sales-and-tenancy-301086074.html, accessed February 2021.
[6] Matterport, “Matterport CEO RJ Pittman Named One of the Top 50 SaaS CEOs of 2020 by The Software Report,” https://matterport.com/news/matterport-ceo-rj-pittman-named-one-top-50-saas-ceos-2020-software-report, accessed February 2021.
[7] News Bites – Private Companies, “Matterport Named a Global Leader in Cloud Computing,” News Bites Pty Ltd, 2020, ABI/INFORM via ProQuest, accessed February 2021.
Real estate remains one of the most backwards industries out there and in desperate need of digital transformation. I think the evolution of iPhone camera / scanning technology will be the determinate of whether Matterport succeeds as a SaaS company. Historically, creating digital twins has included a hefty services component, which is less profitable for Matterport and is often structured as a services contract (think consulting engagement). If iPhones enable easy / cheap / accurate capture of imaging that can be transformed into a 3D model, this could be revolutionary.