Santa Monica-based artificial intelligence company Metropolis Technologies Inc. is applying its technology to parking management and is driving its growth forward with $1.7 billion of new funding.
Metropolis is using the new capital, consisting of $1.05 billion in series C stock funding and $650 million of debt financing led by Eldridge Industries LLC and 3L Capital, to execute an acquisition of Chicago-based SP Plus Corp. The acquisition of SP+, a technology and operations management provider, is set to close in the first quarter and is valued at approximately $1.5 billion.
Metropolis’ product streamlines parking services with tools like automated payments and license plate recognition. The platform allows parking facilities to leverage AI to track the stay time of vehicles and charge customers without the driver needing to stop to pay. The company said that, while its computer vision technology is currently being applied to parking, it plans to offer its “checkout-free experience” more broadly in the future.
Metropolis previously closed a $41 million series A funding round in 2021 and a $167 million series B funding round last year. The company was founded in 2017 by Alex Israel, Travis Kell, Peter Fisher and Courtney Fukuda. Israel now serves as chief executive of Metropolis.
“(It’s) a transformational acquisition that represents both a new paradigm in how technology companies grow and a significant step forward in offering consumers a remarkable experience,” Israel said in a statement. “SP+ is a phenomenal business whose operational excellence, talented leadership team and high customer satisfaction levels have long made it a key partner to real estate owners across North America. The combined platform will seek to bring checkout-free payment experiences to consumers.”
The deal was unanimously approved by the boards of both companies. SP+, which currently trades on the Nasdaq under the ticket “SP,” will no longer trade publicly. SP+ has about 20,000 employees and offers parking services more than 3,300 commercial locations and over 160 airports. The company’s stock was trading at $51.22 per share on Oct 5. when the Metropolis acquisition was announced, up 45% from the day before.
“This transaction delivers immediate and certain value to our stockholders at a substantial premium to current and historical trading levels,” Marc Baumann, chair and chief executive of SP+, said in a statement. “While our technology offerings are successfully fulfilling client and market demand, with increased investment, we see the opportunity to accelerate the technology roadmap for the benefit of our clients and their customers.”
To use Metropolis’ services, customers of a parking facility must provide their name, license plate, phone number and payment information. Metropolis then tracks vehicles and automatically charges the owner at participating parking facilities. The company said in June of last year that its infrastructure was used in more than 600 parking facilities and that, following the acquisition of SP+, it will operate in more than 360 cities in the United States and process more than $4 billion of payments per year.
“While transforming the parking experience is our focus and priority today, as we deploy our proven technology we see opportunity to offer checkout-free transaction experiences at even more places people go,” Israel said. “From gas and electric vehicle charging stations to drive-thrus and car washes, as well as retail stores, our computer vision platform enables people to transact in the physical world with even greater ease than we experience online.”