Over the past few years venture capital money has begun to flow into the Parking Industry. The funding does one of two things. It either allows a company to survive and grow, or it funds rapid growth through acquisition. We have seen both.
The recent purchase of ParkingSoft by T2 is the most obvious. In 2016, T2 was acquired by Thoma Bravo, a venture capital firm. The additional funding brought to T2 enabled it to purchase ParkingSoft, plus expand its existing operations.
But this isn’t all, companies like Spot Hero, Passport, Honk Mobile, Parkwhiz, Smarking, Parkme, ParkX, (now a part of Passport) just to name a few have received VC cash. Do you see anything similar about them. These are companies that are software based. They attract venture capital that is used to supplying money to Silicon Valley start ups. They understand this type of company.
But in general, what does this mean to our industry. First of all, these money guys have considered that investment in parking isn’t a bad bet. These are companies that will grow in an industry that, although changing, will grow.
Is there disruption going on? You bet there is. Any one of these companies could cause large changes in our industry. T2 may become a force in all aspects of the industry, on and off street. Spot Hero, Canada’s Honk Mobile, Parkme (now a part of Inrix) and Parkwhiz could change the way people find and buy off street parking space. Passport is a leader in pay by cell technology. And now they have the money to continue to disrupt.
You might note that I haven’t listed a legacy revenue control company (although TIBA received a cash injection last year.) The VC money seeks out companies that are on the cutting edge not only of technology, but also how that technology is used. Who would have thought that we would be reserving parking spaces from our smart phones? Somebody with big bucks did.
If you remember a couple of decades ago, commercial banking organizations spent a lot of money on parking operators. Allright and Central in the US and NCP in the UK were the three largest who attracted monied buyers. But in every case, the companies ended up being sold at fire sale prices. Is anything different happening now?
I think so.
With a couple of exceptions, the companies are not being purchased outright. Money is being invested, mentors are being placed on boards, and the companies are being allow to continue with the leadership basically intact. After the second or third round of funding, changes in management may occur. But by then the VC companies have been able to learn about the companies they have funded and know the direction they should be taking.
Another difference is age. The management of the parking operators was older, established, difficult to mold or change. These companies listed above have young gun founders. These are men and women from the trenches who actually write and debug code. They understand the benefits and limitations of their product, and believe in it.
In a very few years the way companies in the parking business are funded, started, and grow will continue to change. I asked the question five years ago where the VC money was for parking. It was waiting. The wait is now over.