Smart buildings – those that put technology in charge of everything from HVAC systems to lighting and security – are quickly becoming a standard part of the real estate landscape. The global smart building market size was valued at $53.54 billion in 2021 and is expected to pass $115 billion by 2030, according to data from Precedence Research.
Growth in the market has been driven on a couple of fronts. In the public sector, governments worldwide have encouraged the development of smart buildings as a way of cutting energy use and battling climate change. In the private sector, financial firms are making more capital available to develop smart buildings.
This has spread into various niche markets within the smart building sector, including smart windows that adapt to shifts in sunlight. One of the leaders in this space is View Inc., a Silicon Valley company whose smart windows use artificial intelligence to adjust automatically to changes in sunlight, eliminating the need for blinds. The aim is to improve health and wellness by increasing access to natural light, giving people more outdoor views, and minimizing heat and glare.
View claims that smart windows reduce energy consumption and greenhouse gas emissions by blocking over 90% of solar radiation from entering buildings.
Each View installation includes a cloud-connected smart building platform that consists of power, network, and communication infrastructure and can be upgraded to enable new capabilities and performance improvements over the lifetime of the building. The products are installed in offices, apartments, airports, hotels, and educational facilities.
View was founded in 2007 in Milpitas, California, and has been led by CEO Rao Mulpuri since December 2008. Its stock debuted on the Nasdaq in 2021 following a SPAC merger with a blank-check firm led by Cantor Fitzgerald, though its shares have had a hard time gaining traction. At the time of View’s initial public offering, Mulpuri referred to the IPO as mostly a “financing event.” The company continues to operate at a loss, though revenue has been growing and was expected to reach $100 million to $110 million in 2022.
Despite the lackluster stock performance, View has been adept at raising money to finance its growth. One of its biggest backers is Softbank’s Vision Fund, which poured more than $1 billion into View back in 2018. Other investors include Madrone Capital Partners, which is affiliated with Walmart heir Rob Walton, and GIC, a Singapore sovereign wealth fund.
On Oct. 27, View announced that it raised $200 million in convertible senior notes from an investor group led by an affiliate of RXR, a New York-based real estate firm. RXR Chairman and CEO Scott Rechler joined View’s board following the announcement. Other participants in the round included USAA Real Estate, Anson Funds, and the environmental strategies group of BNP Paribas Asset Management.
Proceeds will go toward supporting View’s growth and path to profitability.
“With the products and operations already in place, this capital allows us to scale our business to broad market adoption and profitability,” Mulpuri said in a press release. “We’re excited to have such strong endorsements from leaders across the real estate industry.”
Convertible notes are considered a potential financing source for companies that need an injection of capital after merging with a SPAC. They are considered less dilutive than traditional equity and don’t have the same restrictive covenants or credit-rating needs as other types of debt.
For View investors, the October financing round is seen as a way to support a company with a potentially industry-changing product and plenty of room to grow commercially.
“Smart windows represent one of the most impactful ways to reduce energy usage and carbon emissions from real estate,” Rechler said in a statement. “View has thoughtfully built the intellectual property, full-stack products, manufacturing capacity, operational infrastructure, and most importantly, a delighted customer base needed to transform the real estate industry.”