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Today Switch Automation closed $5M in a Series A2 fundraising round with lead investor Gaw Capital, a private real estate and equity company, as well Allectus Capital, MetaProp and RealTechX. This will fund Switch’s growth strategy in the Asian market, help double-down on software development and expand the sales and marketing efforts.
“This is a true partnership where we’re bringing the smart building technology and they’re bringing the customers and capital, and they’re also opening up the entire Asian market to Switch,” said Switch CEO Deb Noller. “You’ll see the Gaw team really embracing the Switch Platform and rolling it out across their Asian portfolio. We’re tremendously excited and looking forward to our next stage of growth throughout 2020 and 2021.”
With the rise of PropTech investment, we asked Gaw Capital’s Bill Lee why they believe Switch is well-placed to capitalize on the demand for smart building technology:
How did you first hear about Switch Automation and why did we spark your interest?
I’ve been following Switch since 2015 when I was at Microsoft, where I was responsible for redesigning the new campus. As a part of that process, my team tested technologies for real estate. After interviewing about 12 companies for the retail and facilities group, Switch Automation won, which really piqued my interest. I watched the product implementation, security and longevity of the project closely. Then when I moved to Gaw Capital, I became responsible for property technology investments and I reached out to Switch — we saw their growth and didn’t want to miss out on the investment opportunity.
What most impressed you about the Switch Platform?
The Platform was designed for many different types of stakeholders and portfolios; and is completely hardware and data agnostic. The Platform is very scalable, meaning you can bring in a vast array of new devices across your portfolio to achieve all of your occupancy, comfort, cost-savings, efficiency and sustainability goals. What we like about Switch is that their infrastructure layer ingests 50-year-old devices in older buildings as easily as brand-new smart building tech. This flexibility also means the Platform is utterly futureproof.
What type of ROI do you expect to drive for the Gaw portfolio?
It was a simple decision to use Switch Automation, because it makes sense financially. We brought one of our large buildings in Seattle onto the Platform and found that the value created far exceeded the upfront investment. Right away, Switch delivered cost savings north of 20%. So, if we save $1M per year, our NOI increases by $1M - based on the cap rate, we increased the value of the building by $10M. Not only are we driving cost savings and energy efficiencies but it also future-proofed the building, allowing us to integrate an infinite number of really interesting devices over time, like bio-threat sensors for example.
How urgently do you think real estate companies need to digitize their portfolios?
Big commercial real estate owners and managers should have been integrating great smart building platforms 5-10 years ago. For a long time the incentives weren’t aligned, but the younger generation of customers is so tech-focused that we’re seeing a new demand emerge. Gaw and Switch look at this fearlessly and aim to use our own portfolio to create a powerful example of what other portfolios can do with this tech.
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