AI-driven parking platform Metropolis has raised an impressive $1.7 billion to acquire SP Plus, a leading provider of parking facility management services, utilizing a blend of equity and debt.
The funding round was co-led by Eldridge Capital and 3L Capital, with additional investment from BDT & MSD Partners’ affiliated credit funds, Vista Credit Partners, Temasek, Slow Ventures, and Assembly Ventures. As part of this financing initiative, Metropolis will assume $650 million in loans and secure $1.05 billion through Series C preferred stock financing.
Metropolis plans to invest approximately $1.5 billion in acquiring SP Plus while ensuring it maintains substantial capital on its balance sheet, according to co-founder and CEO Alex Israel in a recent press release. Before this latest funding round, Metropolis had successfully raised a total of $226 million.
“This transformational acquisition marks a new chapter for technology companies and enhances our commitment to delivering exceptional experiences for consumers,” Israel stated. “SP Plus has established itself as a phenomenal brand, known for its operational excellence and high customer satisfaction. This merger enables us to offer innovative, checkout-free payment solutions to consumers.”
Israel, a seasoned entrepreneur who previously sold his company ParkMe to Intrix in 2015, founded Metropolis in 2017. The company specializes in outfitting existing parking structures with a cutting-edge computer vision system, allowing customers to drive in and out seamlessly without needing to swipe a credit card or pay in cash.
To access a Metropolis parking facility, users simply provide their name, license plate number, phone number, and payment details. Through the app, they can monitor their visit and see real-time pricing. The platform effectively tracks vehicles and automates the billing process, sending receipts via email once they exit.
With the acquisition of SP Plus, Metropolis gains a robust, publicly traded entity with a significant parking presence across the U.S. and Canada. SP Plus manages over 3,300 parking locations and controls more than two million parking spaces, including operations at 160 airports.
Metropolis offers a mobile app for efficient parking payment management and related services. This acquisition is another pivotal step toward vertical integration, building upon its infrastructure that powered around 600 parking facilities as of June 2022. Following last year's acquisition of Premier Parking, Metropolis now operates in over 360 cities, serves millions of customers, and processes over $4 billion in payments annually.
“Our primary focus is to revolutionize the parking experience, but our technology provides opportunities for checkout-free transactions at additional venues, such as gas stations, EV charging stations, drive-thrus, car washes, and retail stores,” Israel remarked in the press release. “Our computer vision platform enhances the user experience, allowing transactions in the physical world to be as effortless as those online.”
Recently, Metropolis has invested heavily in analytics, sales, and marketing to tap into the vast addressable market within the parking industry. The startup announced a partnership with Uber to launch Uber Park, leveraging insights from its platform to optimize staffing, pricing, and maintenance at parking facilities. It also collaborates with local businesses for promotional activities within its app.
"This transaction ensures immediate and definite value for our shareholders at a premium compared to both current and historical trading levels," said SP Plus Chairman and CEO Marc Baumann. "We anticipate a promising future for our team members, partners, clients, and consumers, both domestically and internationally. With increased investment, we can accelerate our technology roadmap to benefit our clients and their customers."
Metropolis’ acquisition, priced at $54 per share in cash, offers a remarkable 52% premium over SP Plus’ closing stock price on October 4. Both companies' boards have unanimously approved the transaction, which is expected to finalize in 2024, pending regulatory approvals and the agreement of SP Plus’ shareholders.
It remains uncertain how many of SP Plus’ roughly 20,000 employees will transition to Metropolis, which currently employs around 2,000 staff members.
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