Latch smart lock
Latch

Latch’s Success Shows That Buildings Are Adapting to the Rise of E-Commerce

The team at Latch has had a lot of reasons to celebrate recently. First, they were able to lock down an amazing partnership with one of the biggest parcel delivery companies in the world, UPS. This allows any UPS delivery person to unlock a Latch device a building’s main entrance that corresponds to their delivery with their handheld DIAD (this stands for Delivery Information Acquisition Device but you most likely know of this as the thing that you write your terrible signatures on), allowing them to make the deliveries inside common areas or package rooms.

Then, last week Latch announced a fresh round of funding for $70 million. Not only is this a nice cash infusion, but one of their lead investors is Brookfield Ventures, the newly formed technology investment arm or Brookfield Asset Management, the biggest landlords in the world with almost $200 billion under management. In the deal, Brookfield agreed to install Latch locks in all of their multifamily projects in development.

Smart door locks have been around for a while but Latch had its sights set on much more than just convenient entry for homeowners. From the beginning, the Latch team knew that they wanted to target the multifamily market even though they knew it would be a much harder task than going after single family homes. CEO Luke Schoenfelder said, “There are lots of consumer products out there for single-family home retrofits, mostly because the access needs they need to solve for are relatively simple with a limited user base (a single family) and limited access points – one front door. The access needs of multifamily buildings are far more complex with many users like tenants, managers, maintenance, guests, delivery personnel, service providers, brokers, etc and multiple access points such as main entryway, common spaces, and unit doors.”

The Latch team did their research beforehand to make sure that their offering was tailored to the liking of property owners, “When Latch was founded in 2013, we spent three years meeting with some of the top real estate companies in the country to make sure that our system satisfied their needs. Once we publicly launched – after three years in stealth – many of those same companies not only because customers of ours, but also investors,” Luke said.

I was interested in whether the team was concerned that having a huge property owner like Brookfield as an investor would scare off other large landowners, and Luke dismissed that idea outright saying, “Not at all, and we’ve actually found that it’s quite the opposite—potential customers are more likely to install our systems because trusted names in the industry have backed us.”

Jake Fingert of Camber Creek, one of the early investors in Latch had the same opinion, “At the end of the day, building owners want the best product and they recognize the value of that integration. From a user standpoint it seems like a no brainer for the UPS delivery to be able to deliver packages into a building, but the back end is actually really complicated. Creating a partnership with a large organization like UPS is really rare, and the technical component that gives the right people access to the right buildings at the right time is no easy feat.”

One of the reasons that multifamily properties are worth the extra effort for a smart lock company is that they will probably be the biggest market for in-home delivery. The younger generations will probably be the early adopters of the somewhat invasive prospect of giving a delivery person access inside a home. This younger market is drawn to city centers and is much more likely to rent in a large apartment building.

While Latch doesn’t allow in-home delivery yet, it is preparing for this future by installing the necessary tech into their existing product. As Luke explained, “Latch respects the privacy of residents and has chosen not to enable in-home deliveries at this time, although every door where Latch is installed could support in-home deliveries if residents want those features in the future.”

The dominance of online shopping is likely to only grow. As better delivery networks are put into place by some of the biggest companies in the world, consumers will turn to the internet first for even things like groceries. But for this to happen our built infrastructure has to support the unrestricted movement of online purchases and it looks like Latch is set to be one of the leading tech companies helping buildings adapt to the changes in the way the world shops.

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