64 min read

🎧 #108: Mid-2022 M&A Roundup with J³

“The environment that we've been in for many years and that we are currently in and heading into is very relevant for what's going on in the space, beyond the fact that smart buildings is highly fragmented and there is natural momentum towards M&A and rolling up a lot of these point solutions or single players from just an industry perspective."

—Jeanne Casey

Welcome to Nexus, a newsletter and podcast for smart people applying smart building technology—hosted by James Dice. If you’re new to Nexus, you might want to start here.

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Episode 108 is a conversation with Joe Aamidor of Aamidor Consulting and Jeanne Casey of Nuveen. If you add me in, you get 3 J’s or J³.


This is the second installment of our M&A Roundup series, recorded in late June 2022. This time, we heard about general trends in M&A, then unpacked the two most interesting recent acquisitions in the smart buildings industry and dove into why, our reaction to them, and other trends they’re related to.

Without further ado, please enjoy this Nexus M&A Roundup.

  1. Aamidor Consulting (0:36)
  2. Nuveen (0:38)
  3. M&A Roundup (2:04)
  4. Smart Buildings M&A Tracker (20:34)
  5. Urjanet (21:12)
  6. Quality Building Controls (21:23)
  7. Active Logix (21:30)
  8. IOTAS (23:15)
  9. Measureabl  (27:13)
  10. Hatch Data (27:14)
  11. Arcadia (50:28)
  12. From 2029: A retrospective on how the global office market was halved, who won, and what we should have been doing in the early 20’s (1:13:07)
  13. Amusing Ourselves to Death by Neil Postman (1:19:13)
  14. Stolen Focus by Johann Hari (1:20:02)
  15. Good Life Project Podcast (1:21:00)
  16. The Power Law by Sebastian Mallaby (1:21:19)

You can find Joe and Jeanne on LinkedIn.



  • The general environment that we're existing in (4:10)
  • M&A trends in smart buildings (20:25)
  • Measurabl x Hatch Data (27:14)
  • Arcadia x Urjanet (50:28)
  • The Independent Data Layer and aggregation providers (1:05:20)
  • Carveouts (1:18:01)

Music credit: Dream Big by Audiobinger—licensed under an Attribution-NonCommercial-ShareAlike License.

Full transcript

Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!

[00:00:03] James Dice: hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.

[00:00:31] James Dice: This episode is a conversation with Joe Amador of Amador consulting and Jean Casey. Nevine and if you add me in you get three JS or JQ, so this is the JQ. Cute show. This is the second installment of our M and a Roundup series. And it was recorded in late June, 2022. So this time we heard about general trends in mergers and acquisitions.

Then unpack the two most interesting. Recent acquisitions in the smart building industry and dove into [00:01:00] why our reaction to them and other trends they're related to. So without further ado, please enjoy this nexus M and a Roundup. Hello, Joe and Jean, welcome back to the nexus podcast to you, both. This is M and a murders and acquisitions round two. I'm excited to jump into general trends on M and a and some deals in particular. Do you wanna start with. Introductions, Joe, why don't you go

[00:01:25] Joe Aamidor: first? Yeah, no, James, it's good to be back.

It's good to be with Eugene. I work in the smart building space as an independent consultant, really focused on couple different angles, working with startups in product, uh, market strategy work. So if they need somebody to help with go to market, voice of customer competitive analysis market sizing, do a fair bit of work on the investment side as well.

Usually commercial due diligence for firms that are looking at individual deals and then a little bit of work with owners and operators of real estate that are trying to make sense of this fragmented market that we call smart buildings. We had a really good, uh, set of feedback, I would [00:02:00] say from our last M and a podcast that was maybe three or so months ago.

Uh, the specific piece of feedback we got that was from a couple different different individuals was to bring in more voices to that, uh, M and a discussion specifically, somebody on the side of. The buyer or the user, or you think of that as the, the, those who benefit from these technologies and, uh, you know, James and I both have good relationships with Jean think very highly of her and thought this would be a really good opportunity.

Jean I'll let you give your intro. And, and I think you're friends to the podcast and been on before, but that was the one specific piece of feedback. I'll only add. I love the feedback we've been getting about this episode or this series of episodes. So please keep it coming, email social when I see you at a conference.

[00:02:43] Jeanne Casey: Awesome. Well, thanks, Joe. And thanks for having me back, James. Uh, I'm gene Casey, I'm the global head of PropTech and innovation at Nuveen real estate. We are a very large commercial real estate company. I personally have a background in venture capital, so that's the space I've been in for the last 10 [00:03:00] years.

Mostly focus on PropTech venture capital. So I've brought that skillset and expertise inside of Nove. And I'm also helping, uh, to lead a number of our innovation projects and initiatives. Uh, so I'm hoping to bring an interesting and slightly different perspective to this conversation, both from the venture and investor side, what is happening, who's funding and what is happening with all the venture dollars that have poured into PropTech and smart buildings.

And what's going to happen in the coming months as we enter or potentially have already entered a recessionary environment, that's quite a bit different than the exuberance we've seen over the last, you know, six months to, you know, many years, really, since the last recession over a decade ago. As well as an owner perspective.

So, you know, how Nove or firms like Nuveen, who are very large owners but not necessarily operators. Think about what is going on in the M and a environment.

[00:03:57] James Dice: Yeah. I'm excited. Let's, let's [00:04:00] jump in. So Jean, let's start with you on that recessionary. I've never heard that word before recessionary the recessionary environment we're in.

Can you just talk about the general for those of us that are kind of engineers? You know, boots on the ground heads down every day, not thinking of as much about the general environment that we're existing in. Can you talk about that, that macro world?

[00:04:21] Jeanne Casey: Absolutely. And please stop me if there's anything I need to define or, you know, kind of, I hate the phrase double click on, but double click on really common,

[00:04:31] Joe Aamidor: like three months.


[00:04:32] James Dice: hate when I say that, but I don't where I got that from. Yeah.

[00:04:35] Jeanne Casey: And we need another word. I can't think of one on the spot here, but I was an economics major, so I love nerding out on what is going on from a macro perspective, but I'm gonna try to make these. Following comments, specifically relevant to smart buildings, M and a.

So I think backing up the environment that we've been in for many years and that we are currently in and heading into is very relevant for what's [00:05:00] going on in the space beyond the fact that smart buildings is highly fragmented and there is, you know, natural momentum towards M and a, and rolling up a lot of these point solutions or single players from just an industry perspective.

I think the macro environment's gonna add to that. So let me set a little bit of context. So the, the before times let's talk about, you know, the last few years, general exuberance, as it relates to venture capital and tech startups that led to record valuations in smart buildings and in the general venture space and record funding, uh, as well as really high evaluations.

So this has been good for startups. Good for founders. Good for early employees, less good for potential acquirers because it made the startups more expensive. So a lot of the large incumbents of the world maybe were more hesitant to buy something that had a very high valuation, multiple slapped on it.

That might be different going forward. So let's park, you [00:06:00] know, kind of ideas like that as we unpack what's going on macro wise venture capital money was kind of easy. Everyone and their mother had a new venture fund. There were a lot of non-traditional participants. And so you saw real estate firms get in on the action.

Uh, you saw other corporates get in on the action. Family offices. So bridge people's money, get in directly in deals. We saw hedge funds. Some of the big names are like tiger global CO2, uh, come out over from their public market investing cuz valuations were so high over there, saw an opportunity in venture capital.

So there was more and more money flooding in that hit everything, but also PropTech and real estate technology and smart buildings, I think benefited as well. This was especially prevalent at the later stage. As we saw more capital be available, there were also more paths to becoming a public company and all this money made it possible for these startups to stay private longer.

And [00:07:00] so there's innovations in capital markets like special purpose acquisition companies or specs that I'm sure a lot of people have at least heard of these are or direct listings. These are basically. other more quick routes to becoming a public company beyond just the traditional IPO process, which is quite involved and all of this kind of contributed in my opinion, uh, to the mindset or to a mindset that was really focused on big outcomes.

If you're a startup founder and a little more hesitancy to wanting to be acquired for, you know, 5,000, 200 million, that was not really sexy in the proceeding few years, everyone wanted, saw these splashy headlines that was, you know, the goal. So where are we now? Public markets, tech growth stocks have really crashed from all time.

Highs. NASDAQ is down. I think 30 ish percent since the beginning of the year, I actually took a look at when you guys [00:08:00] released the last, the first M and a podcast. And we're down about 20%. I think prop tech public companies are down closer to 30%. So even in those short few months, things have really changed, right?

Hardware has especially taken a beating. And if you compare that to like software data, businesses that are higher margin, they always command a higher multiple, but just amplifies, I think that's especially relevant to smart buildings, fundraising and MNA, and what's gonna happen going forward. Yeah.

Going to the VC in startup markets. We're feeling the pain now. So it takes, there's a little bit of a lagging indicator for private markets because there's not a stock price being reevaluated, you know, every day and traded in, in real time daily. But we are certainly now seeing valuation corrections in the order of magnitude of, you know, anywhere between 20 and 80%.

So that's a really wide range, but I would say generally later stage larger companies, you're seeing more [00:09:00] of a price correction earlier stage less. So, but still valuations are coming down. Yeah. So power dynamics have really dramatically shifted. Every venture capital firm was fighting to get into the hottest deals, you know, over the last few years less diligence was being done.

Less focus on profitability was, you know, part of the conversation. And that's really changed. But the deal flow hasn't stopped. Right. Uh, so that leads to, uh, what's happening in real estate markets. So the, the pain hasn't really been felt quite yet in real estate. There's also a lagging indicator because it's private markets and it's even more of a lagging indicator than venture capital.

Uh, because real estate is, you know, deals take many, many months rent don't, you know, adjust overnight up or down. But I think a saving grace for the, uh, smart building space is certainly [00:10:00] the increased and enduring focus on decarbonization and a lot of the really high profile enforcement of, uh, a lot of those commitments and statements being made by large firms.

So I realized I just talked for a couple minutes. I have a couple other points to make, but I do wanna make sure I get your guys' thoughts on all of that as I kind of dramatically tee this

[00:10:24] Joe Aamidor: up. Yeah. I, I, I follow the macro environment a little bit and I think that was a really succinct summary of everything that's going on.

The one or two kind of qu quick follow-ups I had just any perspectives you have on earlier stage VC backed companies, if you think there may be more of a correction there, at least in valuations, maybe because it hasn't quite gotten to them. And the other one I've heard anecdotally, some investors have noted.

We haven't seen as much of a correction on climate tech or clean tech. I know some firms use one versus the other. You could argue maybe that's because they're earlier [00:11:00] stage. And if we haven't seen as much of a correction at the early stage by definition, we wouldn't see it on, on the clean tech side. So I guess I question one, do you think there will be more of a correction at the early stage?

And then question two, clean tech specifically, do you think it's maybe a little bit protected or it's just early and hasn't quite felt all the effects of what's happening at, at the later stage.

[00:11:22] Jeanne Casey: Great questions. I think we are going to see a little bit more of a correction or somewhat more of a correction at the early stage, but it won't match the dramatic, uh, retraction evaluations yeah.

At the later stage. And that's for a number of reasons, just mathematically we're playing with smaller starting amounts. And so ballooned valuations got even more ballooned the larger and later stage companies get. So when you're working off a base of, you know, a 500 million or a billion dollar valuation, a correction down 80% is [00:12:00] still potentially in the hundreds of millions of dollars.

Whereas when you're working off a smaller. At the earlier stage, you know, if valuations for, you know, the average seed or series a deal were, you know, 20 to 30 million, you know, a few months ago now they're more like 10 to 20, just the, the base you're working off is is long. That's a good point. I think to your point on climate tech, I think yes, to an extent, but I don't think anything is immune here.

I think the, the same focus on path to profitability, the amount greater scrutiny on the amount of capital investment it's going to take. To really commercialize a lot of these newer technologies is going to remain. I think there's gonna be quite a difference between climate tech or green tech or whatever label you wanna slap on it.

That is capital intensive or requires like a lot of R and D whether it's new, like material science or other things that, you know, require a lot. [00:13:00] Exactly. Anything that's like really big, like that, that capital intensive versus, you know, we're gonna talk about, but like the measurables of the world or the software platforms that help catalyze a lot of the decarbonization, but the earlier parts of that journey, not so much like the more capital intensive parts.

I think just quickly before we jump into more of the detail, the last point I'll make is. Contrasting all of, you know, bit of doom and gloom, I just laid out is that we're coming off a record year and really like record decade of venture capital fundraising. And there's a lot of dry powder out there.

And so dry powder is the money that venture capital firms have raised, but haven't invested yet in startups. So theoretically it's available still to invest. There's a bit of a debate, whether or not that's all going to be called, meaning venture capital firms. When they raise a new fund, they don't get like a check the first day that they launch it, they draw [00:14:00] down capital and they it's called calling capital over time.

An investment period. That's usually three to five years or so. So there's a question, whether in. Depending how bad things get are venture capital firms going to be bold enough to call all the capital that was committed to their funds to invest in this more volatile environment or not. But I don't think it's gonna be 0% of the, you know, few hundred billion dollars that was raised last year.

And so hypothetically, there's a lot of capital out there to plow into venture firms, winning port cos. And there is a really good case for a lot of that money to go to M and a. And I, I think that is likely a good dynamic. That's gonna play out across venture more broadly. And I think smart building specifically is pretty ripe for, to take advantage of that tailwind.

It's not gonna be easy and it's not gonna be for available to everyone. But I think the, the highest quality companies are still going to [00:15:00] be able to access capital. And we're gonna see some interesting M and a in the next,

[00:15:04] Joe Aamidor: you know, 60. Yeah. One of the other themes I've heard gene building on that point, you made about capital calls.

It, it seems like some firms, maybe many venture, uh, funds. They will maybe reserve more of their capital for follow on rounds. But even with that in place, it's still likely that they have enough dry powder, that if they see a deal, they like at a more reasonable valuation. A company actually solving a problem.

Good fundamentals, good growth. Yeah. Your, your point would still be there. There still likely will be capital there for those companies.

[00:15:37] Jeanne Casey: A hundred percent. If you're a prop tech company with good fundamentals solving a real problem and you wanna talk hit me up. Yeah. Um, No, but jokes aside. Absolutely. I, I, I've heard, you know, I'm constantly talking to my VC peers and deal flow has not dried up.

It's down a little bit, but we're still seeing companies, you know, are needing to raise capital and there are some [00:16:00] real good ones out there. And there's also a lot of companies that are either for sale which is interesting and relevant to our com like conversation right now. And you know, now revisiting the terms that they were expecting if they had gone out to market, you know, a few months ago and didn't finish raising their round, but now they're back.

A lot of companies are also opening up their last round of funding. So new investors or existing investors, they wanna beef up their balance sheet to ride out the storm. So a lot of the guidance from venture capital firms is to shore up your balance sheet. So you have at least 18 months, if not 24 to 36 months of runway.

So you don't have to go out and raise. And what's called a down round, which would be evaluation lower than where you raised last time, which dilutes, you know, mostly the earliest equity holders, which are founders, early employees, early investors. And it's no fun for anyone. Right. But inevitably that's gonna happen.

[00:16:56] Joe Aamidor: Yeah. The other point I wanted to touch on and Jean, you, you've probably seen this more [00:17:00] up close, you know, typically if you look back at, at times of just, you know, when the macroeconomic environment is not, uh, is, is, is maybe in a contraction, let's say you do sometimes find really, really strong companies founded informed.

And I think there's various reasons for that one that I've heard is it can be easier to raise and that there's just less companies out there. So if you really have a strong product, it's easier to stand out. Talent can sometimes be a lot easier to come by. Right. It it's. If, if you don't have to up your offer, you don't have to compete against 10 other offers or compete with a candidate.

I'm sure there's others as well. But you know, you don't usually see that at the time. Right. It looks like, oh man, this is a horrible time to be starting a company sometimes in retrospect, actually, that was not a bad time. You know? And, and I, I know, I don't know any PropTech companies, I would say in that category, but I'd say there just hasn't been a recession or, uh, you know, any of this macro environment, we haven't had one for, as you said, 10 to 12 years, uh, and PropTech, wasn't [00:18:00] really a thing 10 to 12 years ago, but that's something else I just would mention.

And maybe you have other thoughts in that those listening who are running companies, founding companies, you know, there, there, there, there can be some positives here as well. No,

[00:18:12] Jeanne Casey: absolutely. I mean, some of the best companies in the world were founded during the, the.com boom and bust Amazon. You know, the last recession, for sure.

Like we saw a ton of amazing plus kind of companies come out of those downturns. I think, you know, there are definitely you know, opportunities to fund great companies, building really focused on building great products to solve big problems. And I think, you know, ultimately even though there is gonna be pain and that's no fun and layoffs and cost cutting are, you know, personally.

For on the human level, never fun. I think ultimately it's gonna be great for our industry because it's going to let the strong get stronger and really, you know, emerge as the really viable companies that are [00:19:00] able to still sell in a BA in a down environment. They're still able to, you know, attract talent or at least retain their talent.

And to, to ultimately, you know, kind of call the field because there's just been so much money, fluff, marketing noise startup, swamp, James, your favorite word. That's been building for many years. I think, you know, it's time that you know, we see kind of who emerges out

[00:19:25] Joe Aamidor: of us. Yeah. And that makes it difficult to buy.

I would say, I mean, that's what I've heard gene you've. I think we've probably had this conversation where when you have too many companies competing for the same. Space and space being solving a problem. It actually makes it harder to buy because you're spending more time trying to figure out the differences, trying to figure out, should I pick this one or that one I've even heard folks, uh, buyers of project solutions have said, oh, I went through a process.

I got from X number of companies down to a short list. And then what did I know about, what do you know about the time I got to the end of it? There were three more entrances that I thought had pretty compelling solutions. What, you know, so you're in this like [00:20:00] restart, restart, restart, trying to get down to, and, and I think that that probably has slowed down adoption a little bit.


[00:20:06] Jeanne Casey: yeah, no, I think that's right. We we've talked before about, you know, funding outpacing, actual adoption, and I think we're, we're now gonna see the flip of that, which I think ultimately will be a good thing. Yeah, definitely.

[00:20:19] James Dice: Totally. Yeah. Well, I love that overall summary. I just learned a lot. I'm just sitting back listening to you too.

Joe, do you want to talk about all, all of the overall, just, just a overall list of the a that's happened? Cause I know you, you track this and we'll put the link to tracker and the show notes, but just list all the deals for us if you could that

[00:20:39] Joe Aamidor: the last couple months. Yeah. And I, I think we last recorded this in March, so I'll just start at April, just April, may, June.

So I have on my, on, on my website a list and I actually just started tracking this on my own and I started sending it to folks, clients, others who are just interested in and everyone said, oh, this is really helpful. So I just put it on my website. Anyone can access. And there are a couple from this that we are [00:21:00] planning to talk about.

I'll just run through them real quick. And of course, anyone can just access this spreadsheet. Uh, hatch data was acquired by measurable. That's one that, that we will be discussing in depth. The other one we'll be discussing is Arcadia buying ANet. They've actually made a few acquisitions. So I imagine we'll talk about not just ANet, but that's the one that happened over the past couple months.

The other ones some of them are, are a little bit esoteric, uh, a services company, building controls and solutions. They actually have a branch or multiple branches. They're doing service and buildings. They bought a technology company called active logic logics. I should say it ends. And the X Allegion, which was spun off of, uh, Ingersol Rand Ingersol Rand used to be a very kinda odd amalgamation of companies.

A lot of security solutions, they own train, they owned, uh, club car. Uh, so that was, uh, and, and they've kind of separated the business, but they bought Stanley black and Deckers access control business. Schneider electric bought auto grid. That's very much on the utility and, and kind of energy management for utilities.

Business auto grid itself sells software for [00:22:00] utilities or other kind of grid operators to use. JCI bought a company in the UK in England, specifically, I think called asset. Plus it's basically an energy services company, an ESCO they retrofit buildings, they provide the financing and then you're paying back your debt on the energy savings.

This is a very interesting model. It's grown quite a bit. I think there's a lot of traditional ESCOs. That typically have longer length contracts. And then you now have companies that are more, uh, going under the brand name of, or, or the, uh, the category name, energy or energy efficiency as a service.

Generally, I see those as being very similar. Fundamentally the funding may come from a different source. The, uh, mechanics of how that debt is paid back can be a little bit different. There there's a lot of nuance in, in the financial engineering side of it, but generally the idea is we can provide financing, upgrade your building.

And, uh, generally you're seeing startups, uh, or I should say smaller companies get rolled together by [00:23:00] private equity. And, and that's oftentimes on my list there there's, if I had to pick the types of M and a we're seeing that roll up play that PE firms are doing. Is one of the most common, but the asset plus acquisition, even the bigger established ESCOs are making some acquisitions here too.

Mm-hmm ADT bought iOS. iOS was, was generally a smart home platform, but really smart home for multi-family ADTs. Interesting. And then I think, well, Google invested or bought, I think 10 or so percent of ADTs business now ADT the, the home security firm. Most of the time they are giving you Google nest products.

So that was kind of the terms of the deal we'll buy. Part of your company will give you an infusion of capital use our tech. And that obviously helps because a lot of the old school home security tech is not nearly as robust as a nest. Uh, uh, there's other smart home products out there. Uh, uh, Amazon has a lot that are, are widely used, but they bought iOS and iOS.

Really what they provided was I don't think they would call it middleware, but. You know, if you have a smart lock on your door that has [00:24:00] that's advantageous to the owner of the, the renter of the property, but maybe you also want to connect that to Alexa, your Alexa speaker that you are bringing well, how do you, you're bringing your speaker.

You're not bringing your, your smart lock. So they provided a little bit of that, that, that uh, connectivity they did more than that. But that's, that's one example. HQO bought Leeman. This is one that actually just came up. HQO very well known. They're a workplace engage. App or platform. This was, they made an acquisition of a company um, office app in Europe, but Leeman tends to be kind of a data platform, maybe a consulting firm.

They have a, a certification as well for workplace experience. So you can get a lead certification for green buildings and you can actually validate Korean buildings, same thing with, well, which is a healthy building standard and Leeman. You can be a Leeman AP. And I remember seeing people in my network even two or three years ago, get the Leeman AP me too.

I actually time didn't know what it, what it was me too. Um, Yeah, yeah, me too. So now you kind of know, and then the last one so [00:25:00] far is Schneider electric was, uh, acquired or they acquired I'm sorry, EV connect, which is EV charging, but more the software part, there are some EV chargers. Charging companies that own the asset own the chargers are, are installing all that, uh, EV connects a little bit more of the software layer.

That's also not as relevant. I think most interesting just to add a little bit of commentary. Schneider electric has actually been fairly acquisitive of all the companies on, on the list, uh, more recently, but most of their acquisitions are not directly in what I would consider smart buildings. They're they're and, and Schneider is not only a smart buildings company, either.

They have businesses in a lot of other areas. They already had a big business serving utilities. So it's not, uh, it's not surprising. But, but they've definitely been making acquisitions kind of on the edges versus I would say in the core. Uh, and, uh, I think those are all, all of them. I, I actually updated this list yesterday.

I didn't mean to, but I'm glad I did. Uh, so, so that's what we have thus far.

[00:25:57] James Dice: Awesome. Yeah. And it seems like even though [00:26:00] that feels like a lot, that's still weighed down. Yeah. It seems like from

[00:26:03] Joe Aamidor: previous quarters, the, the, the other point to make, I mean, I sometimes for my own interest will, will add up number of deals.

I certainly will be a hundred percent, uh, clear that I at times have missed them and added them late. So I wouldn't say this is a fundamental core. Everything is in on this list. There's some subjectivity in what smart buildings what's not are, is the vendor enough of a smart building player that regardless of who they're buying, you should include it.

Right. The first couple months of the year, there were just, especially in, in January, there was a lot being announced. That could be because a lot was just held. Until the new year, because announcing a deal on December 15th might not be the right time, but yes, it, it, there's a lot, it's a little slower than earlier in the year.

It's hard to make a lot of that. Just, you know, comparing one quarter to another.

[00:26:50] Jeanne Casey: I think it's, it's gonna be again, like a lagging indicator. I think on average, even with a VC funding, you don't necessarily announce that till months [00:27:00] later could be for lots of different commercial or otherwise reasons.

Yeah. So I wouldn't be surprised if people see the impacts of, you know, what's going on right now. Yeah. To the end of this year into

[00:27:11] Joe Aamidor: next. Exactly. Totally. Yeah. Okay. All

[00:27:14] James Dice: right. Let's jump into our two that we're gonna deep dive into. Are you guys ready?

[00:27:19] Joe Aamidor: Yes, ready to do this.

[00:27:21] James Dice: All right. So first one measurable buying hatch data.

So, let me, let me sort of start off with what I think this is all about, and then you guys can kind of chime in and respond. So I think about this in terms of the decarbonization journey, right? So the first major step in the de any decarbonization journey is getting data reporting benchmarking and measurable, really.

Pretty much has that covered. And it seems like they have a lot of traction, a lot of buildings, a lot of customers that are using them to do that. But, and this is where Joe and I's past experience comes in when a building owner wants to actually start doing something, you know, in other words, I know what [00:28:00] my usage is and now I want to actually act on it.

Right. You kind of have to stop your journey inside the measurable platform. There really isn't much for you to do until next year when you come, it comes time to start reporting on it again, essentially. So that's why I see hatch data being so valuable here. They can basically, maybe it's a different software.

Maybe they end up integrating them at some point, but a user can essentially. Uh, continue the journey on password measurable was before. So now you can start pulling in interval, meter data all your HVAC equipment data, and use that to start to identify opportunities for energy savings, engage with the right stakeholders around those opportunities.

They have fault detection, diagnostics to allow you to start to basically go deeper into the analysis of the data. So essentially once those tools are combined, you now have the full journey essentially. So you can now take it from, I set a target of net zero [00:29:00] by 2030, or whatever, and I can actually use these two tools to get to that journey, give or take almost there's some functionality I think they could add.

But for the most part, this is kind of like what we talked about last time, Joe. They're one of the few companies now that sort of span that whole journey. Whereas if you look at the rest of the marketplace, it's everybody sort of focuses on one step in it to all these different, different energy management point solutions.


[00:29:25] Joe Aamidor: Oh, go ahead. I was just gonna say, and even, I mean, measurable typically is getting utility bill data, which if you have a large portfolio and you have buildings across many different geographies, I, in our country or in many countries, it can be very quick to get utility bills quicker than, than actually getting interval data from every single building mm-hmm

Um, so that gives you a vis that gives you enterprise visibility. If you think of it that way, that allows you to understand current state, current performance, energy, uh, you know, energy per square foot, or [00:30:00] that's kind of what goes into energy star. That gives you a very quick how I building's doing. Um, So that's useful.

That certainly is good for sustainability reporting carbon, uh, emissions calculations. But you then have the bottom upside from hatch where we actually can identify. What's the reason that this building has a very high, you know, energy use index. Yeah. And the building next door to it, same weather, same size doesn't measurable may not with just the utility bills, really be able to get to that.

Mm-hmm but you could argue the people who are using measurable are probably asking that question. And I, I would imagine, I mean, I've heard just informally that there are clients that are using both happy they're together, cuz it's just a more simple procurement simple vendor relationship now. I think that there's, there's probably more than, than that than I've I've heard of, but that makes sense.

I mean, that's the logical question people will ask and then the flip side may be true as well. You have a couple of very high profile, very complex buildings. Maybe they're in areas where there's high demand charges. They might go to the hatch product, say, look, this is gonna help us identify why we have high demand charges, avoid them, [00:31:00] not avoid them, but prevent the higher than, than necessary charge, which saves a lot of money.

Oh, well then now we need to start reporting around sustainability. So, you know, they both could serve as entry points for a new client, but I think most clients as the market matures will need both of those capabilities.

[00:31:16] James Dice: Yeah. And I wanna go back real quick to the granularity question. So measurable typically monthly data hatch data, typically hourly or 15 minute data typically, right?

Yeah. I think there's another nuance here with that. Right? So the nuance to me is if you look at the decarbonization journey, there are a lot of tools that focus on. You know, monthly data or sort of big picture annual data. And that really caters to a certain type of stakeholder within the organization, which is a sustainability person.

That's thinking about the portfolio. And I think the challenges that tools like that have is that that person can't drive action at a site level. They have a really hard time engaging with facility managers, technicians, uh, service providers [00:32:00] that are only providing services or, you know, their time only spending their time on one site at a time.

And I've seen that gap be pretty, pretty large that site to portfolio gap. If you look at hatch data, they're typically they do portfolio level analysis for sure. , but they're typically spending time and their general, their primary users are facility managers and people that are on the, on the ground boots on the ground.

So you have this now team, I think that helps, you know, bridge that site and portfolio gap that I think is a really important thing for people that are trying to solve decarbonization problems, because decarbonizing doesn't happen at the portfolio level. It happens at the site level, which is tough.

[00:32:44] Jeanne Casey: That definitely resonates for a lot of what we're working on.

And to an extent we're like a portfolio of portfolios, maybes mm-hmm . So that gap that, that deeply resonates. I guess I have a question for you guys. Mm-hmm do you [00:33:00] see this acquisition as or this, I guess this, this general move as trying to become more full stack these two together? Or is there evidence.

That they're trying to become more interoperable. So question the context for that question is when I'm thinking about, you know, what is at the building level across our portfolio portfolios, we're not gonna, you know, it's impossible to roll out a single vendor, like a hatch, or just pick one, because we've got a ton of existing other competitors to hatch.

Maybe we've got some hatch, maybe we've got some Aqua core. Maybe we've got a bunch of other stuff. Right. So is there evidence that, that, uh, all of my data across these disparate building level patch and hatch competitors can be interoperable. Can I, can I view that all in the same place within, you know, at the measurable level?

So when I'm a portfolio portfolios, I can see [00:34:00] everything. Even if it's not within this one stack.

[00:34:04] Joe Aamidor: Do you wanna go first, James, go ahead, Joe. Oh yeah, I think so. I think, uh, generally what I have seen and heard you're right at individual building levels, it's, it's hard to standardize and there's a variety of reasons for that.

Who's managing the building, which could be different than who's a, who owns it experience with a product that maybe has been rolled out has been successful and just the, the inertia or the churn of, you know, we need a good reason to rip out and replace one solution. That's I think one of the re it's a bit of a, a side note, but a lot of the larger controls companies, they don't seem that threatened by any of these companies.

And I know that's a slight slide, but I think part of that is because they know that they have their controllers and their valves and their actuators and their, you know, building automation systems running on that hardware in the buildings. And it's just very costly to rip out and replace. I generally think most of these solutions that I've seen at least offer an API that would allow the data to be exposed.

But that's really exposing the, [00:35:00] the, the information or the data, the raw data that allows somebody to then basically write a, a connector to the API to, uh, receive the data. Right. You can share it and then you can receive it. I don't actually have good visibility or good knowledge of if, if measurable has integrations to all these solutions.

I think that there are kind of other ways around it, the data from a hatch or an Aqua core or any of their, their peers, a grit, they usually will send the data to energy. Star energy star has its own kind of data solution for free. Anyone can use it, you can exchange data though, send it automatically. You can also get the data out.

I think there's a permissions issue. You know, if you're a new VE you give permission for a vendor to access the data out of energy star. So that's maybe part of the, the data, not the raw data. So in terms of what are those APIs include? It's not always that every single data piece of data is available, but generally vendors seem to be moving towards having an open API, allowing access to the, the data, but that doesn't always solve the whole problem because.[00:36:00]

Maybe there's not a good solution on the other end to accept that information except that data, or maybe it just, it's something that has to be built inhouse. I'll stop there. I hope that kinda answers the question to some degree, but I think there's more that will happen there just because we have this kinda overlapping mess.

Somebody at RealCom mentioned to me, uh, he, he kind of felt like the vendors in this space are like ven diagrams on top of each other where no one really directly competes with anyone else. Every vendor, you know, this vendor might have eight, uh, capabilities, core capabilities. Yeah. Maybe a couple other vendors have five of them and other vendor has three of them, but they all have other vendors.

And I tend, tended to think of concentric circles, same idea, kind of same visualization. Mm-hmm that's going to, I think push various buyers of solutions to ask more about where's the central data. Where's how do I get your data out into somewhere else? It's starting to happen, but I think it'll happen more,

[00:36:52] James Dice: James.

Yeah. I, I think where my mind went with this and where, what I would think about if I were a new, which is [00:37:00] basically what are my, and, and we're in that second half of the decarbonization journey, right. Which is basically like, what projects can I do to reduce my consumption? What are the next steps on those projects?

Which projects are active? Can I verify the success of those projects and then sort of maintaining performance over time using software. So I think those are like the steps. And if you think about, if you guys had, so you guys had 700 buildings, something like that, right. So if you guys had five vendors that were, you know, providing that second half of the sta or the journey, I would be thinking about what are the common.

Concepts that are within each of these tools for that second half of the journey, which is basically projects tasks that maybe go underneath each of those projects opportunities, maybe those are smaller than projects. Maybe those are like, you know, some sort of way to abstract a way that complexity, that extract to way the complexity that's in each of the hatches and the Aqua cores and the whatever of the [00:38:00] world.

I have not seen anyone solve that, I guess, to get to your original question, gene, getting to where there's some sort of abstraction layer or an independent data layer, which we'll get to later. That is basically. You know, serving as the middleware between you guys and whatever you want to do at a portfolio level and whatever whatever's going on at the site, haven't seen it yet.


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[00:38:57] Jeanne Casey: we're more like 4,000 buildings around the [00:39:00] world. I don't know

[00:39:01] Joe Aamidor: where I got 700,

[00:39:02] James Dice: maybe that's one of the sub portfolios

[00:39:05] Joe Aamidor: portfolio, portfolio

[00:39:07] Jeanne Casey: portfolios.

[00:39:09] James Dice: I did wanna go back to the procurement point. Joe had earlier to Eugene, which is when you have, when you see a vendor acquire another one like this, and now you can maybe cover the whole journey with just one.

Is that a good thing? And what does your mind go to when that happens?

[00:39:30] Jeanne Casey: All being equal? Yes, yes. Yes. And all being equal, meaning the outcomes are as good, if not better than engaging with two separate vendors. And the price point is. Equal or lower mm-hmm or ideally some combination of the two. And it doesn't make, you know, uh, that lack of an independent data layer and doesn't render obsolete, lots of other technology we've already [00:40:00] deployed.

So I'd say from, you know, from a new VE like perspective a hundred percent, I'd rather, or we would rather deal with one vendor. So commercially it's just, you know, an easier process to manage one relationship. And then also logistically to deal with an institution, the size of ours. Gosh, like our, our vendor evaluation and onboarding process is a doozy.

And it it's a lot of time and resources on everyone's side. And so to the extent we can consolidate. And get the same or better outcomes. And then also at a, you know, a same or lower price point, I think a hundred percent, if, if those kind of efficiencies are achieved, it makes a ton of sense. I think that's gonna be even more true heading into I'll use the word again, recessionary environment where we're, you know, and everyone else is tightening our belts and kind of buckling up for whatever ride we've

[00:40:52] James Dice: just started.

Yeah. Yeah. Do you think, get, getting back to your kind of full stack question too? What I see a lot of vendors doing in [00:41:00] this case where they can do a ton, but you might not want to buy. Everything they can do for every building in your portfolio. I see a lot of vendors have like this modular pricing approach where you can turn on and turn off different parts of the app.

And I assume that's what measurables probably doing here is even if it's a separate tool, it's probably within their, you know, comprehensive offering that you could then turn on and turn off for some, some buildings. It's obviously not that easy to turn it on and turn it off. But that's the, that's the sort of pricing approach I would assume.

[00:41:33] Joe Aamidor: Yeah. That's generally what I've seen from pricing. Sometimes you have, uh, I can't think of a firm specifically offhand, but just like the good, better, best. That's very common. Just in SAS. In general, the idea is to try to move people to the best over time, if not initially, and then some vendors. I think, especially in buildings and project might have additional modules that like, oh, if you get to the best, but you need more for a specific capability, we have a module for that.

[00:42:00] Mm-hmm , maybe that's good, better, best, you know, extra best. I don't, you know, but, uh, but there's different ways to go about doing it. Um, That seems a map really well with just selling software. I think it's easy to understand and can be based on square footage based on seat license based on actual building.


[00:42:17] James Dice: So let me ask you to this, about this deal. So when we talk about point solutions and then point solutions getting combined, which is, I think what I, what we're talking about here. Yeah. And not to denigrate anyone by calling 'em point solutions, that's just kind of where we're at, right? Yeah. But when you have two point solutions getting combined, and they're still both energy, carbon management, now you have a bigger point solution.

So I think my question to you guys is, is there a bigger acquisition coming for measurable then at some point that gets in, you know, integrates measurable into a more comprehensive product that serves customers with more than just ESG

[00:42:53] Joe Aamidor: or decarbonization PSG, or D privatization.

[00:42:55] Jeanne Casey: So go ahead maybe, or I can see measurable as a platform [00:43:00] to make additional acquisitions that further diversify their revenue streams, and also inorganically build their customer base.

Let me unpack what I just said. So , diversify their revenue streams. So here here's a point that I, I wanted to raise and kind of just bounce off you guys measurables been around for a while. I mean, I think to a great extent, they were maybe ahead of their time and kind of foreseeing commercial real estate's feet, being held to the fire for being accountable for the massive carbon footprint we generate as an industry.

And everyone's kind of heard of them. So there, it kind of begs the question in the environment the last couple years where there's a ton of money, uh, plenty of PropTech hype. Increasing focus on ESG, everything, you know, did they maybe kind of tap out that one revenue stream and like current set of customers to a bit, or to an extent.

And, you know, you could also view this acquisition as diversifying [00:44:00] where, how they're making money. And then when I said inorganically, add to their customer base, a company can either grow what's called organically, which is, you know, hire more biz dev folks sell more stuff grow that's called organically.

Inorganically is through M and a. So basically buying another company and overnight, you know, you have that company's customer base. So they did both here. I mean, arguably every acquisition does both mm-hmm but I think it's an interesting point to just note they've been around for a while. So, you know, what does that mean?

Is that even relevant? Curious what you guys think.

[00:44:41] Joe Aamidor: Yeah, I, I, I think James trying to pull together your point and then Jean kinda the, the, the following point you made this definitely could be a platform in kind of the, the financial sense of starting here. There are definitely other bolt-ons that you could do, [00:45:00] uh, ones that could make sense.

Uh, health and wellness is becoming part of sustainability in some ways. And there are solutions to monitor indoor air quality. There are solutions for reporting health and wellness. There are standards for health and wellness. So, you know, there are, there are, are, are pieces like that, that I think absolutely this could be, uh, a platform.

I also think commercial real estate while we sometimes think of it as being. Behind. If you look at all the different types of real estate assets, I think the sustainability reporting use case there's more adoption. I think on the commercial real estate side than in a lot of other categories, you could say the mush market, which municipal university school, healthcare universities are certainly making a point of being sustainable.

And they use that to attract, uh, students and attract staff don't know that they're nearly as robust in their data reporting. I also don't know that there's nearly as many standards out there for universities where you have to report same with, with, with, uh, cities school districts. You could argue they're a little bit more budget constrained or [00:46:00] resource constrained more, more generally.

So maybe that's why they aren't doing as much, but you, you could argue that, uh, with a wider solution set, there's more opportunity to take maybe parts of it and go to some of those other verticals. And then that kind of captures gene point where maybe they've they've penetrated as much in commercial real estate as possible.

Uh, So, so, so there's certainly that there are also, I would say thinking maybe a little bit bigger, a different angle. There are a lot of companies that I think view energy and sustainability. If you combine those, I know we've just talked about how there's actually a lot of nuance there, but if we just think of that as an issue or a leg of a stool you do have a lot of kind more broadly facility management type companies making those acquisitions.

So a couple, I don't think we talked about them in detail on the podcast, but formerly dude solutions, they've now rebranded to brightly. They're basically a CMMS, a, a computerized maintenance management solution for, you know, schools, uh, K through 12 schools, universities to some degree hospitals, city.

So all, all these much marks they bought a company in [00:47:00] Canada called energy profiles, limited. Really didn't have a lot of visibility into the us market, but, uh, very much like a measurable, maybe a little more consulting plus software, not just software. Uh, there has been a history where dude has bought. I say, dude, uh, brightly has bought companies and kind of built, taken the anchor or the, the, the, the beachhead and, and grown.

They, they did this with a CMMS for senior care centers. It's now a really leading hospital, CMS hospital care hospitals, senior care, not exactly the same, but, but pretty close. Uh, MRI software bought eSight energy. eSight was a little more on the side of energy reporting and interval data, but I would say.

They checked some boxes on, on the, the sustainability reporting side. Again, MRI just being kind of a, a larger, more established real estate software company. I think there's other examples there as well that I'm, you know, I'm not quite thinking of. But you know, there there's that too, where now measurables a little bigger, has a bit more of a, a, a breadth.

The other side of it, there have definitely been other companies like measurable that have raised [00:48:00] a lot of money. Eco Vaus EcoVadis I think they just raised what 500 million, a couple weeks, couple months ago. They're unicorn now, uh, earlier this year deep key, which they're both Europeans. So those who, who are listening to this in, in America may not know those names as well, but deep QRAS 166 million.

And again, very much around the story, sustainability, carbon management decarbonization in real estate. So there's also just more competition and well capitalized competitors now that are in that same space. There's also, and without. Getting too far off topic. There's a lot of these kind of NextGen carbon management platforms, which are not always focused on real estate.

There's some, that's just focused on corporate carbon emissions that are certainly raising a lot. I think one watershed, which some have heard of, I think they are a unicorn also. They're pretty young. So companies maybe work unicorns. Yeah. They were uniforms. Yeah, totally. Uh, it raised last year. So, but, but there are a lot of companies that are still seemingly they see that space as white space or at least competitive territory.[00:49:00]

So from that point of view, measurable, maybe just positioning itself to be in a differentiated light where we don't just do sustainability reporting. We actually have a, a broader platform.

[00:49:09] James Dice: Yeah. I was gonna say, Jean, on that, this is a great point, Joe. I was gonna say that I think the buyers in our industry look at measurable being around for a long time as a very, very big plus.

Right. We have very fair our, our buyer and, and maybe the venture capital world looks at measurable and says, you know, they should have got acquired or gone public by now. Why are they so late? It's a negative thing. But building owners wanna see that you've been around for a really long time. And so, you know, you could say, Hey, they could be.

The platform because they have that long term trust, who knows? Yeah. I think there's a lot, there's a huge jump. I think, from going from ESG reporting to being a comprehensive, smart building platform, serving all these different use cases. So I'm a little bit skeptical that that's a possibility. [00:50:00] Yep.

[00:50:01] Joe Aamidor: Do you have any other number of new acquisitions you could say?

I mean, there, there definitely, you could, you could put together a strategy and say, look, there's three more acquisitions we wanna do. I don't know if the number's three, but yeah, that would get, maybe get you there, but, but I tend, tend to agree there's more to it than just interval data and kind of fault detection.

Yes. You're reporting.

[00:50:18] James Dice: Totally. Yeah. Any other, any other comments on, on this one before we move to the number two?

[00:50:25] Joe Aamidor: No, it was great.

[00:50:27] James Dice: Yeah. Okay. Arcadia buying ANet and Joe, if you wanted to inject in other Arcadia acquisitions, as we go here, please do. I was focused on a, my mind's kind of focused on ANet because I think it's important from a bunch of different reasons inside that same energy management or carbon management journey.

So if we remember back to what I said earlier, the first step is getting data, right. I have to be able to understand what I use before I can understand how much carbon IIT, right? So that's, [00:51:00] that's kind of the step that we're talking about here. So Arcadia is an interesting company because they're a community, solar developer and residential utility data provider.

So they, before this acquisition were not in the commercial building buildings industry at all They basically sync with your utility. And I I'm about to sign up for my, my house on Arcadia, but they essentially, what they do is they track your electricity usage. Then they source verify, purchase and retire, renewable energy credits for you.

And then theoretically, then you are then purchasing only renewable electric. For your house. That piece is fun and all, because I think now they can do all that for commercial buildings as well. And once they expand their customer base and their connections to utilities and that kind of thing, but the interesting piece, I think, is the whole, like basically sync with your utility piece.

Right. And that's why they bought ANet essentially. So ANet, that's what they do, right? They are utility data platform where you give them your username and [00:52:00] password to your utility account and they will log in their software. Scrapes. The screen basically pulls all the data out grabs the data off your bill and gives it to anyone via an API.

So they, they, they basically are. Uh, both of these offerings are the, the, you know, an answer, a tech answer to utilities, being horrible at allowing customers to use their own effing utility data. Right. It's a, it's a terrible, terrible, terrible thing, but it's a tech answer to this terrible thing, essentially.

So before the acquisition Arcadia's arc product covered 125 electric utilities and covered 9,500 electric gas and water utilities. So to me, this acquisition is all about all of those prebuilt integrations and all of those utility websites. So if you think about the time urgent or Arcadia, would've had to spend to allow their customers to access all those other 9,000 [00:53:00] utilities.

I think that's what this acquisition is all about. They basically have immediate access to all that utility data because of all of that work that ANet has done in the past. It also gets them into commercial. Like I said it gets them from electric only into gas, water waste, and even telecom data as well.

And I think in general, the big theme here, I wanna say right before I kind of kick it over to you guys is that these companies are not full stack, right. They exist only to be an API. They exist to provide data for others to build applications using that data. And I think that's a key theme where basically urgent, you know, I've used in the past urgent abstracts, the way the complexity of getting all of that data from all of those different utilities.

It's just one API. I register with them and now I have a data feed coming. I don't have to worry about, you know, what happens if the utility changes their website three months from now? I don't have to worry about that [00:54:00] because ANet abstracts the way that complexity for me. And I think there are a lot of companies in the commercial building space that are already using ANet.

I, I think I saw somewhere that they have 30% of the fortune five hundreds building, something like that. So there's a lot of companies that are either using ANet directly or they're going through a provider, like measurable. Like we just talked about that is most definitely using ANet on the back end.

[00:54:25] Joe Aamidor: Yeah. And yeah. And, and that's a very real problem that Jeanette solves. When I was a product manager at JCI back 12 years ago, now we had a product and we were manually entering utility bills. And this is right as ANet was launching. So I negotiated a partnership with them because they were providing, they used to call it the, the piping, right?

It's like, it's not, they said like, it's not pretty, it's not very, uh, flashy, but man, you need, you know, piping and that's true. And that, that is the core of what they did. The other acquisition Arcadia made. I think just in short order, just earlier in the year, maybe end of last year was [00:55:00] with gen ability.

Gen ability is a company. Many have probably heard of very much the same model as ANet, except instead of utility bills, they have a database. And they collect utility rate data and rate. Data's a little different, right? You don't get a new rate every month. Rates may change every three months, every six months, if they don't change.

Usually the utility is at least publishing a new rate schedule. Every individual utility for commercial, really the complexities on the commercial side, not so much on the residential side, those getting a little bit more on, on the residential side. But with commercial, you may have 10, 20 rate tariffs.

And depending on how much energy you use, if you're, you know, a school public school, you get better rates in a lot of cases. If you're a high consumer factory, you get worse rates and it's all about, you know, what are you paying? Not only for total consumption, but also demand how much you use at certain times, even the schedules can be a little different.

And then you, uh, you look across the fact that electric utilities, there's what 3,100 in the us, there's maybe a couple hundred that are IOUs. So at least [00:56:00] like bigger companies with offices in downtowns. Maybe working with dozens or hundreds and sure. Your vendor, uh, like a hatch or any of those companies could get and capture and digitally enter your rate.

But it's just a lot of work that's a little bit outside. So both of these companies, they solve a little problem. Well, a big problem. That's not quite big enough for you to solve yourself in house, uh, or the value of solving it in house is not commensurate with the cost. It would take, it would actually be a lot of money to build an urgent like solution and urgent and gen ability.

To some degree, they're both able to sell that across the entire community of vendors, not just in individual vendors. So they're able to, to spread those costs of development and overall maintenance. Two, all of those, those users, uh, across all those companies, uh, also, there's not a huge competitive threat.

You would think, you know, we were JCI. Uh, you would think we would be skeptical of working with ARG net because what if Siemens or train or Schneider works with them. But at the end of the day, acquiring the bill itself is [00:57:00] not really where you're going to differentiate any of your product. And you know, they can very quickly get you to the point of pay per bill per month or per meter per month.

You get the data it's reliable, it's through an API it's consistent standard. So, so that makes sense. The acquisition I'll just say really quickly. I think it does get them into commercial without a doubt. I think it, it even combining gen ability and. There's some value in having those solutions together.

I always wondered in my head, if you were collecting that many utility bills, I don't know the raw number of utility bills ANet collects. Could, could they, with that information actually kind of back into all the rates and that's probably more difficult than I'm making it out to be, but you could maybe start for certain areas to start figuring out what are the rates just by looking at that many bills.

It's funny.

[00:57:44] James Dice: I was going in the opposite direction. I was going, now that you have the utility data, you could make sure they're on the right tariffs.

[00:57:50] Joe Aamidor: Right. You could do stuff like that as well. And that that's true. Yeah. I mean, tariff, uh, rate tariff consulting is a real thing. Oh yeah. As you get it's typically, as [00:58:00] I've seen very much consulting, right?

Like somebody is reviewing your rates, reviewing your bills, advising you on new rates. There's a lot of opportunity to do that in a more automatic way, either serving as a platform that allow the consultants to do it more efficiently or just doing it direct. I, I think there, there, these data sources, some ways are really valuable and maybe we haven't quite figured out what are all the use cases with them, but Arcadia has been growing a lot.

I think they raised a lot of money. They seem to be on the right track. They seem to be. Pretty innovative, you know, so there's a lot of opportunity I think, for them to figure out how else can we use this? Even beyond everything you said, Jean,

[00:58:34] James Dice: I'll let you, I was gonna say real quick, this, this sort of category of acquisition, I think is interesting.

Cuz you can see it happen in the broader tech sphere as well. So when you have a company that says our product is an API, they're gonna buy any company that makes that API stronger. Right? So that's, that's exactly what gen ability is. ANet data is really important. Gen ability's data is really important.

[00:59:00] Combine the two and now I have an even stronger API than either of them, which I think is an interesting sort of product theme

[00:59:07] Joe Aamidor: hundred percent.

[00:59:08] Jeanne Casey: And no, I think, sorry Joe, were you gonna say

[00:59:10] Joe Aamidor: something? Oh no. I, I was just agreeing with James.

[00:59:15] Jeanne Casey: No, I think what you guys both said just now is why I've been really interested.

We're kind of fascinated with APIs in PropTech. Generally. I think Joe, when you said we haven't really discovered all the use cases, I think all of these companies have a little bit of a chicken and egg problem that there isn't as much, especially for the real estate industry, not as much of an innovation ecosystem existed until pretty recently when there's been all this venture capital funding to start all these companies and start figuring out, Hey, like we can sell into this massive market.

Mm-hmm so I think this is really interestingly timed acquisition and James, to your point, there's not two Twilio's for a reason. And so if you could pull ahead and be the [01:00:00] defacto utility API, I mean, that is super valuable. And there's probably a, a ton of interesting use cases and businesses that can be built and will be built because that exists.

[01:00:12] Joe Aamidor: Totally. Yeah. The one kind of interesting question that I have about this, there was in the press release that that was published about the acquisition Arcadia had in there. Basically, you know, our goal is to, is more of like forward looking visionary. Our goal is to kind of, you know, check, you know, collect the data, analyze the data, provide, I think it said something like provide the applications.

And one of the things that, and I Thinkability to some degree have not done. And it's probably on purpose is they've even though they have the data around utility bills, they do. I think you can report directly those, uh, those bills into energy start. You just really wanna get your energy source score.

But in general, the data is sent to the application developer and there's many of them and they do everything with the data, right? Yeah. So [01:01:00] the value is actually being delivered. And I think that's by design because if, if ANet said, oh, actually we're going to add um, advocate that the application layer, then they become very competitive with all their customers and there's enough customers.

They're totally dependent on those customers. Yeah. All have an app. It'll be interesting to see what is Arcadia's view on that because Arcadia is a bigger player. They do have some history of, of being a little bit more end to end, right. Community solar offering in residential. And you also have some alternatives to utility.

API is one they raised, I think 10, nine or 10 million recently it's around the same time. I'm sure it was coincidental. But, but that's a, a firm and there's a few other firms out there that have started saying, you know, we might be able to digitally acquire, uh, or automate the acquisition of utility build data.

Yeah. I'm sure. There's some companies out there that have built their own solutions in house that just started before ANet stuck with it and said, you know, this is we've already built. Most of we, you know, once you've gotten some of the, the effort, uh, or some of the, the platform developed maintaining it is less expensive than building it from scratch typically.

So, so that's another interesting one, you know, does, does this become the [01:02:00] start of, you know, Arcadia building out more capabilities? They certainly, as a company seem to have a bigger vision around what they provide beyond just being a data platform though. That is, yeah. Yeah.

[01:02:11] James Dice: I'm gonna chalk that up to some PR persons, uh, fluff that they were adding to

[01:02:16] Joe Aamidor: it and also could be.

Yeah. Yeah. It's speculative on my part. I'll be, I'll be the first to admit that. All right.

[01:02:21] James Dice: One of the things I wonder here, maybe Jean, you could answer from the Nove perspective is. Do you want to buy this from Arcadia? So, so say you agreed that this thing should exist in your stack. Right. Do you wanna buy this from Arcadia or do you wanna make sure that say just hypothetically, if you were using measurable, you just want them to handle it, right?

You want them to get the data and don't even want to interface with it at all? And the reason I ask that is I advise companies a lot. Right. Mostly on the product side. And one of the things that I feel is really important is [01:03:00] maintaining access to this data. Right? So if, if, if I have a, a zero carbon target, the most important piece of data is my usage.

And, and in maintaining that. And so I guess I just have this fundamental belief that I shouldn't. Buy a full stack from anyone I should buy the components of it. And if I wanna fire a measurable, I at least still have access to my data when I fire them. That the whole thing doesn't go away and I'm not starting over again.

How do you think about this gene?

[01:03:33] Joe Aamidor: That's

[01:03:34] Jeanne Casey: that's a construct we are constantly discussing because candidly, today we don't have the capability, the headcount, the ex, the technical expertise to do much. And I don't think I'm exposing any like trade secrets here. We're, we're very, uh, cognizant that we're a real estate firm and we're gonna buy off the shelf for as much as we can.

[01:04:00] However, our data strategy is really, really core to everything we do, and we're spending a lot of time and resources on building that capability out. So I think the answer is. yes. And meaning yes, eventually I would like, I think we would want to be able, well, we certainly want access to the data and whether that's directly from, in our ACU slash or something in our commercial contract with a measurable like solution or any sort of software platform that does it for us.

And it, we always, I think will have the culture and DNA of a, if a best in class software company can do something for us. We would like to work with them. We're not a development shop. We're a real estate firm. And so let's take the best, you know, solutions we can off the shelf with [01:05:00] the caveat that we definitely want to own that data because it's incredibly important to our, you know, strategic business and decarbonization

[01:05:08] Joe Aamidor: goals.


[01:05:11] James Dice: Joe. Any thoughts on, on that from your perspective?

[01:05:15] Joe Aamidor: No, I actually think gene that's, uh, I I'll leave it there. Yeah. That good. So, one

[01:05:21] James Dice: thing I wanna do is kind of zoom out on that acquisition and sort of zoom out to the whole trend in the industry going towards these independent data layers. Right.

Mm-hmm I think this, this acquisition specifically is interesting because if you think about for a given portfolio, they have all types of data, not just utility data. Right? And so if they were to have a data layer that had all of the data. Related to smart buildings in it, then that data layer would need to get data from Arcadia in this case or from utility API or whoever.

And I, I, I [01:06:00] just think this trend has an implication for that layer, which is basically there are a bunch of different types of data. And there are a bunch of also different types of abstraction providers or data providers that the independent data layer of the future is gonna need to be able to plug into all these different types.

I don't know if I have a question there, it just seems like that's, what's gonna need to happen. If the, this ID thing is gonna take off, I think the question I do have is maybe back to Eugene on sort of what you think about that concept in general, given your VC background, given your involvement.

[01:06:42] Jeanne Casey: It's a big question.

I mean, I think. Directionally that's logically where we head as an industry. I think the follow up question I have is how many providers cover that whole [01:07:00] span or is, is the big bet? Is there, is there one that would be wild, but yeah, I think it's, I'm, I'm trying to like think of a, another industry, you know, comparable yeah.

Construct and I struggle to, maybe you gotta accept some ideas. And so I wonder, is that gonna be one behemoth, just giant winner that will really unlock some interesting things as it relates to, to PropTech and smart buildings. Like that's that seems like the, yeah, that's only grail, if you will. Or more likely in the short, medium, and maybe even long term.

How many players, you know, give that and soup to nuts and to end same experience or outcome,

[01:07:48] Joe Aamidor: I guess. Yeah. And I think kinda adding to that a thought, I think it's, it's, you know, you have, you have different data sources that mean different things to different consumers and [01:08:00] not every consumer needs the exact same sets of data.

So the independent data layer, the independent data layer has value. And we've often, or James, you specifically have often talked about it within I'm operating large commercial buildings, but you look at the Arcadia example, there are reasons that a residential solar subscriber community, solar subscriber may benefit from urgent solution.

Even though I would argue that's probably not where they were heading initially. Maybe they weren't even recently thinking about that as. A target user. But those individuals do not need, for example, to acquire, uh, building automation system data, because homes don't really have a building automation system.

And even if a multi-family building, does you as the operator or not the, the tenant or the resident, the condo owner probably don't need that information. Those data, you probably still have a thermostat that you can change yourself. That's a hundred percent your control. So that's where the independent data layer as a concept makes a lot of sense, [01:09:00] depending on who you're talking to, who the user is, what their stack looks like.

I think that there's going to be some nuance in what parts of what sources of data might they need. And I don't know if that will ever get worked out though. I think that on those more complex, higher end buildings, large offices, like what Nuveen would own in, you know, downtown New York or Chicago large university, large hospital, which are probably not owned by VE, but are still very complex.

They might look at this and say, look, yeah, we, anything we can do to independently, uh, unlock our data from all these different sources. There's one vendor to do that. That's perfect. You've seen that. Alright. At least I've seen that in some cases at universities where they might have one utility meter from their utility and they only have one because they usually can they might have a, a substation on their campus.

It might be a gigantic, you know, large public university, like where I went, where they even had a power plant on campus. Right. That was pretty common for big 10 universities. Everyone had a power plant. But they may also want to break down the data. [01:10:00] By each department, each floor, and they sometimes have bought their own data solutions to do that, just in-house on campus.

That, that, that is a need in, in those cases. Uh, so for them independent data is important, but it it's very focused on a certain set of data that's relevant for a large, you know, university campus. Mm-hmm I, I

[01:10:20] Jeanne Casey: think actually that, that last point struck a chord. I think there's gonna be a lot of commercial real estate that needs education around the art of the possible yeah.

With tools like this. I think today you're hard pressed to find many commercial real estate firms, especially large ones that are, or that have technical, uh, capacity and expertise on board to, to really figure out how to unlock a lot of value. Directly with all of that data. I think ideally we all want it.

The question is, you know, what is the price [01:11:00] of fig of, you know, how to get it versus the value we could actually derive from accessing it? Yeah, I think that'll, that'll change over time. I think it's, it's become much more clear in the last couple years. Like that's where we're headed, but I don't think we're quite there yet.

So it'll be interesting to, you know, track how education to ultimate end users or beneficiaries, you know,

[01:11:26] James Dice: kind of unfold. Yeah. I'm writing, obviously writing this series and about this sort of horizontal architecture of which the IDL is part of it. And I'm concluding with the messy middle as like, because I, I think that we've all decided that like this makes sense most, most people in the nexus community at least have said.

This makes sense. Like I'm giving you feedback, James, like, this is a good idea. We should all do this, but we're in this space, like spot where like people are implementing point solutions, all of this, uh, consolidation is [01:12:00] happening. You know, people haven't even started yet. People like don't have internal teams.

So there's like this massive, all the procurement processes aren't aligned for horizontal layers. Like there's so many obstacles from here to there. And I think one of the things I'm wondering, just being skeptical of the concept, and even though people give me credit for the concept, which is crazy, but do we have the legs to get to that point, right?

Or are, is everyone just gonna go out and buy directly? Sort of full stacks from whoever. And I, I think that ties back into the mergers and acquisitions. Cause like, if we go back to like measurable becoming a platform, are they just gonna acquire the full slate of, of capabilities? Yeah. And, and then someone buys that from them.

And then you have the next company that does the same thing, building engines or whoever else that's gonna keep acquiring and acquiring. And the horizontal layer concept never takes off because all you have left is four to five big companies that [01:13:00] are just full stacks. You know what I'm saying?

[01:13:02] Joe Aamidor: Yeah.

Well, it, it's an interesting question. Others are thinking about it as well. I, I put this in my newsletter. That's coming out. It would probably be out by the time, but uh, there's uh, somebody who I think runs strategy at equim and he's been writing on medium, his name's Paul Stanton. I think I said this maybe to both of you or one of you, but it, it was basically just.

  1. Looking back on what happened to offices. He's focused specifically on offices. One of the things he says, I'll just read the quote is a quote directly in 2022 and 2023 access control tenant experience, building operations, space management and IOT smart. Building technologies get rolled up by private equity to a few large providers with the core value prop evolving to become predictive analytics, allowing property managers to focus primarily on their front of house services.

And that's kinda later in the talk or the, the, the write up, I would argue the nuanced approach. I don't know that all of those get rolled up together because you could argue there may be some buildings or some types of uh, asset categories where it doesn't make sense to roll them all up. I would say IOT smart buildings.

Isn't a thing as much as it's a lot of [01:14:00] different things, but that's more maybe for the nexus community, but the idea there is, you know, you're pulling together all these pieces together, all these pieces. I don't know that it will be a few PE back firms. I think it's really the controls companies are playing here.

The FM companies are playing here. Startups and, and kind of disruptors are playing here. Tech companies might be playing here. One of the ones we didn't mention IBM bought VI. They already own, uh, Maximo. They own TRIRIGA, you know, they seem to be interested in playing here. A bunch of other companies you could argue.

So it might not be a few, but it's not hundreds, which is what we have now. He's saying predictive analytics, but really you have to have that base of data to then run the predictive analytics on top. And I think if anything, the more abstracted way to think about that is a data layer, right? The, the value will be when you have data from many different sources, you can pull it together.

You can do more with it. I think that's absolutely, uh, a, a valid point. I mean, it's hard to, I, and I also dunno, 20 22, 20 23. It might take a few more years. Yeah. That that's kinda to your point, James,

[01:14:57] James Dice: I think where I'm at with that is like, say [01:15:00] that all happens. I, I, if I'm a building owner and a portfolio owner, I still go back to, okay.

I still want to that layer to be separate. Yeah, so that I could fire that other, maybe there's gonna be five ecosystems applications at the end. Yeah. I still wanna be able to pick the other one and not have to

[01:15:18] Joe Aamidor: start over.

[01:15:20] Jeanne Casey: I think if there's one area where it's like a non-negotiable that we want to own, the data is around the energy and, and carbon footprint and sustainability stuff.

So I think if there's a wedge in here, it's starting there. That's why I think we definitely should watch measurable. Okay. And see if, if you know, the future unfolds kind of like we're how we're talking about, but first focused on sustainability data. And that comes from Joe. I think you made a point earlier, like universities and other types of real estate owners are not as focused as commercial on the reporting of sustainability metrics.

And that comes [01:16:00] from the, the demands of real estate limited partners, which are investors in the funds. So like very specifically, we have a ton of fund mandates that say you will achieve, you know, X percentage of this portfolio will achieve Y GREs score and meet these kind of, you know, decarbonization metrics by Z year.

So, you know, we're, we're bound to fiduciary responsibilities, not only to, to return capital, but to abide by our. You know, fund documents and, and commitments made up front when we're fundraising. And that, that goes for all of commercial real estate or at least

[01:16:38] Joe Aamidor: right. Fascinating adding to that real quick.

I know we're, I'm watching the time too. The commercial real estate firms, your business is in, in building developing, managing, and operating workspace. Usually workspace, I guess doesn't have to be only workspace, but, but I'll use that term. Whereas if you look at a lot of just companies out there, they're maybe adopting, uh, aggressive [01:17:00] sustainability goals, but they may be around other things, right?

We're a restaurant. We wanna source everything from, uh, uh, local sources, if possible, or, or, or we wanna man, we wanna address, uh, fertilizer because that can be, or, you know, we wanna, you know, use less meat because meat actually is pretty bad for the environment. Uh, at least cows in particular, you know? So there's a lot of different ways to angle it airlines, right?

Like obviously every airline has office buildings. And they have airports, I guess they lease that space, but really their core let's have a net zero goal is around the airplane. So I think that's the other angle where like a university, you could, you could argue they're a little similar in that the buildings are what enable them to educate people and train people.

But but I agree that that that's, that, that I just wanted to add that, that point, but that that's right. All right. Well, let's

[01:17:44] James Dice: shut this down. We could go all day. Let's shut this down. Yeah, we could go all day. Yeah, this is fun. I think we're gonna have to do this again next quarter. See what happens.

Keep, keep going with this series. Thank you to both for lending your opinions and expertise here. [01:18:00] Let's send 'em with car outs. Yeah. No problem. Let's end with carve outs. Uh, so what book, podcast, TV show would you recommend people check out? I'll go first. As you guys both know, uh, I, I caught COVID at RealCom thanks for the partying, the partying party gift, uh, from the conference, uh, to everyone that talked to me face to face about how much they love the podcast.

I'd like to thank one person for maybe more people for, for giving me more than just thanks. So while I was sick last week, I watched all six seasons of Peaky blinders, and I would not recommend anyone do it. I'm more just saying it because it's what I did. It's not really a carve out in that. I think anyone else should do what I did.

It's a very dark show. That said, if anyone wants to talk to me about it, I'm happy to talk about it. Cause I think it's a fascinating, fascinating period piece.

[01:18:51] Joe Aamidor: Your next community, the nexus community and the

[01:18:54] James Dice: yes, the next community. Anyway, I'll stop there. I'd say don't do it. If you haven't started this show just don't even [01:19:00] bother and I'll suck you in and you won't be able to think about anything else,

[01:19:06] Joe Aamidor: Jane, you go next.

[01:19:08] Jeanne Casey: Sure. So, because the book is on my desk, I just started reading a book written in 1985 called amusing ourselves to death by Neil postman. Super interesting in the age of social media to revisit some very astute thinking on how television and media in the, the eighties was melting our brains and changing our culture.

And it's super relevant. I think still those themes today. And it's interesting to take a. A little bit of a, you know, recent historical lens on a lot of crazy stuff going on in society today. Cool. LinkedIn,

[01:19:45] James Dice: but it's good book relevant to me getting my brain melted by Peaky blinders.

[01:19:51] Joe Aamidor: Right. Sounds like on that note, I actually, I had a couple books.

The one that I'll I'll share, I I've started reading and I'm in the middle. I had to give it back to the [01:20:00] library cuz apparently it's popular these days. Um, Stolen focus. I think it came out earlier this year, last year, Tia, an author Johan Hari, H a I and it's really around just how we're not able to focus and, and, and I'm met the part where he goes through this.

Time where I think he goes to an island, I think off Cape Cod, maybe Cape Cod is the island, but anyway, you know, off and just doesn't take anything with him other than like a flip phone and talks about just how, like he had become before that. But then he starts digging into the research. He interviews different people.

He starts talking about what are, so I'm at the point where he's going through the problem he hasn't gotten to. What's the solution he's, you know, talked about a little bit, I will say, just some of the stories you read in there. And I don't feel like I'm really, really distracted. But obviously like everyone else, I use social media and, and, and you know, it, it pulls you in, it was pretty alarming.

I definitely, you know, woke up a couple mornings, read the book. I was like, I'm just gonna like put my phone over there and not touch it for four hours. Yeah. I highly recommend that. I think the other one, I, I forgot what individual podcast. [01:21:00] There's a social psychologist, Jonathan height, H a I D T he's talked a lot about he wrote a long article in the Atlantic called why the past 10 years have been uniquely stupid.

And he talks a lot about social media being the poor. I haven't read all of that, but I've listened to a couple interviews on podcasts. And then the last one, I'll say, I, I I've been reading a book by, uh, Sebastian Maby called the power law again at the library halfway through have to get it again. But he talks a lot about the history of venture capital.

He goes to a lot more depth, even though like personal stories of like, how did the founders of Google get Eric Schmidt to come work for them? Because when he joined them Google, wasn't really a very big name. And Eric was a pretty big name. So, and he goes through, how did, how did VC really have a, a part in that?

It's called the power law, obviously because returns in venture capital follow follow a power law distribution, right? Usually one investment will pay back the entire fund. And you know, everything else. That's why, so he's actually done a couple interviews as well, ma M a L L a B Y. And the interviews actually are excellent.

Right. So you can just spend an hour listening to one and deciding, do I want to listen to that? Do [01:22:00] I read that? Do I not? I know I took two extras, but I, I thought two of them looped into the comments, everyone else or that. Yeah,

[01:22:06] James Dice: totally. Yeah. I have read all of stolen focus and highly recommend anyone check that

[01:22:11] Joe Aamidor: out.

It's great, Gary, in a good way, maybe so

[01:22:15] James Dice: all. Well, thank you. We'll do this again soon.

[01:22:18] Joe Aamidor: Yeah.

[01:22:19] Jeanne Casey: Thanks guys. Thanks. So for having us.

[01:22:25] James Dice: All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.