New York based Latch has topped up its Series A with a further $10 million in external funding, bringing on a new investor RRE Ventures. Existing investors also participated. The smart lock maker has now raised a total of $26 million since being founded, back in 2014, and recently opened up availability for its products nationwide within the U.S.
“We didn’t have plans to fundraise but we had a really open conversation with RRE in March, we’ve known them for a long time, and saw that this could be a great moment to add another partner to our team,” says co-founder Luke Schoenfelder.
“With this funding we’re able to grow and support our national sales team as we push into new markets,” he adds. “We’re seeing a huge amount of growth in markets like Miami and Los Angeles and it’s important for us to be able to fully support customers outside our home market of New York City.”
Unlike many early movers in the smart lock space, Latch targets the enterprise market — selling its Internet-connected locks plus a subscription digital entry management service to building owners that want to be able to offer value-add services to their tenants, such as the ability to give out access codes to delivery companies or use key cards to gain keyless and mobile-less entry to an in-building gym.
It trailed the advent of a second smart lock in March, which firms up its proposition by adding a purely electronic access product. The initial Latch lock, which launched last year, works with mortise locks and includes a physical handle and slot for an actual key. With the two devices Schoenfelder says it can serve a greater variety of buildings — including large commercial offices and multi-occupancy apartment blocks.
“We have massive competitors in the enterprise space, but none of them are startups,” he argues, couching the team’s software chops — both co-founders are ex-Apple — as a key (ha!) disruptive advantage.
“Our biggest competitors are Assa Abloy in Sweden, Allegion in the U.S., and DormaKaba, a Swiss conglomerate. They’ve all been in the business of making metal locks for decades (over a century in some cases) and that’s just a very different competency than building highly complex hardware, software, digital product experiences.”
That said, convincing slow moving real estate owners to invest in digitally minded upgrades is still clearly not the fastest growing business in town. And is Latch not disclosing customer metrics at this still early stage.
“Our biggest challenge is simply competing with the status quo and shifting the adoption curve forward,” he admits. “Almost everyone sees our system and thinks that it will inevitably end up in their buildings, the question is whether or not it will end up in their buildings this year or five years from now.”
Where does Schoenfelder hope Latch will be in a year’s time? “I hope that we will have completed a premier apartment building project in each of the top 25 U.S. markets by this time next year,” he says on this.
He also confirms that the domestic market — which Latch spent years in stealth tooling up to support so it can comply with stringent buildings regulations — remains the focus in the short term. Now buoyed by a fresh cash injection.