Chief Executive Officer and Founder / SmartRent Inc.
Science-fiction writer Author C. Clarke once wrote, “Any sufficiently advanced technology is indistinguishable from magic.” In a world where every real estate sector – save the rental sector – was guided by electronic technology, CEO Lucas Haldeman’s pioneering SmartRent Inc. brought a much-needed element of alchemy and a true Midas touch to an oft-forgotten segment of the industry.
The success of SmartRent Inc. – the first and still only major provider of smart home and property operations solutions for the rental housing industry – boils down to one simple factor: having found a market need and filling it.
“When we started SmartRent about seven years ago, it was because we saw a need in the marketplace for a company that understood technology and rental housing and that understood the unique dynamics of all that,” SmartRent Founder and CEO Lucas Haldeman told CEO-North America magazine in a recent interview.
“Frankly, big tech didn’t understand rental housing, and rental housing certainly didn’t understand big tech.”
Consequently, Haldeman said that he realized that “there needed to be sort of a bridge” that linked the two together.
“When we looked at the opportunity, we saw that nearly every other sector of the real estate industry had moved to using some sort of smart device,” he said.
“The market opportunity was just massive. This was an untapped market of 44 million homes in the United States alone, before even going outside U.S. borders. And none of these rental homes had any technology at their disposal.”
SmartRent offers a specialized technology platform focused on rental housing that includes a range of options such keyless entry, water leak detection and smart thermostats/climate control.
Haldeman said that being the first company to recognize the need for rental housing technology gave SmartRent a leg up over other firms that would later join the market, but it was no guarantee of a permanent first-place position in years ahead.
But Haldeman, who in June 2023 was named as an Ernst & Young’s Entrepreneur of the Year Pacific Southwest, said that he is confident that SmartRent will continue to lead the ever-expanding market of rental technology.
In terms of product expansion, Haldeman said that SmartRent has “a deeply, deeply integrated platform with a lot of backend work incorporated to make for a really seamless and fluid front-end experience.”
“I think that the challenge with expanding internationally is making sure that you’re not trying to take something that works well in a U.S. business model and force it into other business models,” he said. “Our goal always is to improve the lives of renters, and to do that, we must have a product that really works well. By not rushing in and by making sure that we do our upfront research, we can ensure that there is constant quality control that is the key to maintaining responsible growth.”
The company, which went public in August 2021, has attracted more than 500 top multi-family operators as customers, including the top seven apartment real estate investment trusts and Invitation Homes, the largest owner of single-family rental homes in the United States.
From 2021 to 2022, SmartRent’s revenues grew by 53 percent, and the company is forecast to grow by 43 percent in 2023 to $240 million.
In the third quarter of 2023, the company registered revenues of $58.1 million, up 22 percent year-over-year, and gross profits of $13.5 million, up over 1,000 percent year-over-year.
“I think that we are now in an outstanding market position,” Haldeman said. “We know that we can only accomplish this through operational excellence. We have some of our brightest team members, our best engineers, working on internal operational efficiencies.”
Haldeman concluded by saying that SmartRent sees the current rental properties market as a “greenfield opportunity.”
“If you think about every hotel, every office, every other kind of real estate, they all have transitioned to have smart devices, but rental housing hasn’t,” he said.
“There is a massive opportunity that we’re sitting on, and we are the leader. We are in a pole position to capitalize on that. And that is exactly what we intend to do.”