Finally, we acquired shares of SmartRent, Inc. (SMRT, Financial), a leader in technology for residential rentals. SmartRent provides a suite of renter products including keyless entry, self-guided tours, smart parking, video intercom, package delivery, community wifi, leak detection, and temperature control management. SmartRent’s products enhance the convenience and experience for renters, while enabling property managers to increase rents by $25 to $100 per month and reduce leasing costs. SmartRent has an open-source, hardware agnostic platform allowing for ease of integration with existing hardware and property management software combined with a large and growing installer network that creates a strong moat in the retrofit market.
The company has already deployed 200,000 units to over 450,000 total users and has experienced zero churn to date. Through strategic partnerships with 15 of the top 20 institutional apartment owners, the company has a pipeline of 600,000 committed units to deploy, which represents a subset of the 3.5 million unit opportunity within its existing customer base. SmartRent charges a low recurring base monthly fee of $8/month to apartment owners. We estimate that cross-selling current products to current customers could yield a $2 billion recurring revenue stream, with additional growth generated from new customer acquisitions and new product launches. In addition, we believe there is upside potential longer term through emerging initiatives that could open several exciting adjacent growth verticals such as international and student/senior housing. Lastly, with approximately $500 million of cash, we expect M&A opportunities to layer on additional services to augment growth both to the product offering as well as monthly pricing.
From Ron Baron (Trades, Portfolio)'s Baron Growth Fund third-quarter 2021 letter.
