Spacer, an Australian-born online marketplace that helps businesses and households rent out spare space, has beefed up its global footprint through the acquisition of American counterpart WhereiPark Inc.
The deal, which puts Spacer a step closer to a potential stock market listing, has effectively doubled the size of the business through a merger with one of the largest marketplaces for monthly parking in the US and Canada.
The acquisition, details of which have not been disclosed, has been funded through a private capital raising from existing Spacer shareholders and high net worth investors. The deal builds on Spacer’s existing Parkhound business in Australia and adds to its established presence in the US after its 2017 buyout of US-based Roost, a peer-to-peer on-demand parking rental platform.
Spacer co-founder and CEO Mike Rosenbaum tells Business News Australia that the acquisition of the Toronto-based WhereiPark is a landmark deal for the company.
“This is a much more sizeable acquisition (than Roost) that effectively doubles the size of the group,” he says.
“We see it as a step-change for the business and certainly puts our flag in the sand that we are very serious about our expansion plans and aspirations for the North American market.”
Rosenbaum highlights the strength of the business-to-business model developed by WhereiPark and the alignment of the founders with Spacer’s existing culture as key strengths of the combined group.
“WhereiPark have really strong relationships with REITs (real estate investment trusts) across the US and Canada and they also work with a lot of corporates such as car rental companies, construction companies and big corporates such as Tesla and Facebook as clients.”
Spacer has more than 50,000 listings across Australia and now ‘more than that in North America’, according to Rosenbaum.
WhereiPark founder Jeremy Zuker, will head the group’s North American operations and help deliver on the expected revenue synergies the merged group will provide.
“We are at the early stages, but it is going really well,” says Rosenbaum.
WhereiPark, established by Zuker and Alex Enchin in 2014, operates parking marketplaces in 22 cities across North America, working some of the region’s largest residential property owners and managers.
Spacer, founded by Rosenbaum and Roland Tam in 2016 initially as a peer-to-peer marketplace, has since evolved to become a hybrid of the peer-to-peer, business-to-consumer and business-to-business models.
“It’s a full marketplace and we have a lot of relationships and growing relationships with REITs, traditional parking operators, traditional storage operators and alternate partners,” says Rosenbaum.
“People are getting more resourceful now because for some businesses it’s a tricky time in the market. They have these underutilised assets, so it makes sense to monetise them.”
Rosenbaum says he and Tam have held ‘big aspirations’ for the business since its foundation.
“We really loved the concept of the sharing economy. We could certainly see a huge gap in the market where there was all this available space, but people had no way to know where that space was and how to access it," he says.
“While storage and parking and these kinds of alternate asset spaces are often overlooked and are less sexy than accommodation or fashion, for example, there’s a real everyday need for them.
“We still consider ourselves as being early stage even though we’ve been at this for years. We certainly see this as a very big business with huge potential ahead.”
Finding space for an IPO
Although Spacer has outlined plans for an IPO and stock market listing in the next 12 months, Rosenbaum says there is no immediate rush to raise fresh capital, especially in light of turbulence in global share markets.
“We have aspirations to go to an IPO in the next 12 months but at this stage our focus is integrating the two business and working hard for our partners to drive more business their way and maximise revenue synergies," he says.
“We have a really good business that is profitable and growing rapidly, so there’s no need for external capital at this stage.”
Spacer’s North American operations are benefitting from a massive upswing in demand for space with traffic now ‘worse that it was pre-COVID’.
“There is an insatiable demand for parking as more and more people are opting to drive and return to work,” says Rosenbaum.
“Storage is very strong too with more people clearing out space in their homes to have hybrid work from home scenarios. We actually need more supply.”
While Spacer has its eye on further expansion, the company plans to bed down its latest acquisition first.
“We certainly have global aspirations but for now we are focused on North America and Australia,” says Rosenbaum.
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