UPDATED: Sept. 29, 11:15 a.m.: Smart-intercom startup ButterflyMX has raised $35 million in growth capital to meet surging demand for contactless entry in apartment buildings.
The round, led by Volition Capital, brings the company’s total funding to $40 million. Founder Cyrus Claffey said the company will use the money to develop additional products and tap new verticals, including commercial real estate. Egis Capital, RiverPark Ventures and Stifel Financial Corp., also participated in the round.
Founded in 2015, the New York-based startup uses smartphone technology that lets tenants and property managers see and grant visitors building access without using keys or fobs. ButterflyMX is currently used in 4,500 properties across the U.S. and claims to have more than a million users. Clients include Greystar, AvalonBay Communities, Lennar, Lincoln Property Co. and Equity Residential. (The Real Deal Publisher Amir Korangy is an investor in ButterflyMX.)
With just a touchscreen, ButterflyMX automates building entry with “virtual keys” akin to QR codes and secure PINs. Visitors can use the app to place video calls to residents, and deliveries can be automated by giving drivers limited-use codes to access the building.
“Most buildings still use plain old keys. But once given out, they’re impossible to get back,” Claffey said, adding that ButterflyMX is a more secure and convenient option. “We live in a mobile-first world.”
Claffey said the company will use the new capital to develop products that can be used inside buildings — not just at the front door. Claffey also wants to expand to new verticals, including commercial real estate, and expand in select international markets where it has existing customers.
The 125-employee company will also look to hire another 80 staffers within 12 months. “There’s a tremendous runway in front of us,” Claffey said. “This raise was designed to help us grow aggressively.”
ButterflyMX closed the round in March 2020, but held off announcing the news because of the pandemic. Claffey said the spike in deliveries and demand for contactless entry has been an eye-opener for owners and property managers. “The industry has been a laggard. All the residents use smartphones to manage and control their lives,” he said. “The industry hasn’t kept pace, so I think Covid was a wake-up call.”
Other smart-home startups have experienced a similar spike in demand.
Latch, a smart-lock startup based in New York, said it did $100 million sales in 2019 and is on track to surpass that amount this year. Backed by Avenir Growth Capital and Brookfield Ventures, Latch has raised $152 million and was most recently valued at $400 million.
Competitor SmartRent, which makes smart-home hardware and software for rental apartments, raised $60 million in May.
Household names like Google and Amazon have also played in the space for years. Earlier this year, Google invested $450 million to acquire a stake in security giant ADT. The deal gives ADT more firepower when it comes to tech-driven security solutions.
Last week, Amazon also debuted a slew of new smart-home devices. They include a home-camera drone and pivoting speaker with camera.