Matterport Inc., [NASDAQ: MTTR] is a California-based spatial data company that provides 3D and virtual reality-enabled visualization. The Company uses a camera and cloud technology to capture three-dimensional spaces and produce immersive and navigable virtual reality (VR) and 3D models. Since its founding in 2011, Matterport has grown from an expensive 3D cameras manufacturer to a subscription-based cloud service with more than 15 billion square feet of data in its portfolio.
On 22nd July 2021, Matterport went public on the NASDAQ after a merger with Gores Holding VI Inc., a special purpose acquisition company (SPAC) backed by institutional investors such as Tiger Global Management, LLC, Fidelity Management & Research Company LLC, Senator Investment Group, and Dragoneer Investment Group. In total, Matterport raised $640 million in gross proceeds from the offering.
Since then, Matterport has shown immense growth, with reports indicating its presence in more than 5.6 million spaces. It boasts more than 404,000 subscribers in more than 150 countries globally. Its Q2 2021 financials recorded $29.5 billion in revenues representing a 21 percent growth from Q2 2020. Matterport’s most significant chunk of revenues comes from subscriptions at 15.381 billion. Its license revenues, at $2.09 billion, and other product and service sales, at $12.123 billion.
Matterport’s Business Strategy
Matterport has established itself as an industry leader in the 3D space. Its success can be attributed to its unique business model, which allows it to control all aspects of the VR/3D ecosystem, from hardware development to content creation, processing, distribution, and monetization. This approach places Matterport in a stronger position to achieve market dominance in the long run.
It operates under a freemium business model, where the basic service is available for free. However, users will need to pay a premium subscription fee to access better features and functionalities of its cloud platform, such as uploading the files to their websites. Moreover, Matterport implements strategic pricing for its services, encouraging early adoption to grow its user base. For instance, customers will pay between $10-$300 depending on the number of users and the tools they need.
Matterport is focused on developing a comprehensive software ecosystem to capitalize on its existing market share. Over the past few years, it has invested in creating a completely immersive experience beyond capturing and viewing a 3D model of a space. For instance, with Matterport’s reach being expanded to mobile devices, users can now explore the model through a mobile application and experience the area from any vantage point.
Matterport SWOT Analysis
Strengths
- Strong market position: Being the first Company to introduce a solution for creating and managing virtual reality and 3D content, Matterport entered the market with an early advantage. Since its launch in 2011, Matterport has gained considerable market share, as evident from the 15 billion square feet of 3D space already hosted on its platform. Despite other well-known players in the market, Matterport remains a dominant force with its unique R&D capabilities.
- Comprehensive software ecosystem: One of Matterport’s biggest strengths is its constantly evolving platform. The Company provides services ranging from 3D modeling to facilitating content sharing and distribution through its platform. It provides an SDK that allows for the integration of its tools into third-party applications. Thus, Matterport can meet the various requirements of its customers and ensure that they can harness the full potential of its platform.
- Strategic partnerships: Matterport has forged partnerships with industry leaders such as Facebook AI, SIMLAB, APEX, and PTC to improve its product offering and capture a larger market share. For instance, its collaboration with Facebook AI aims to create and release the world’s largest dataset for 3D spatial mapping. This will provide Academic researchers and developers with machine learning resources to develop spatial AI applications.
- Strong financials: Despite the raging COVID-19 pandemic, Matterport’s financials remain strong. The Company’s Q2 2021 revenue increased by 21 percent, representing significant growth in the market. Its increasing revenues are due to its strategic partnerships with industry leaders alongside an expanding user base. The Company expects to increase FY 2021 revenue to $123 million, putting its P/S ratio at 27.
Weaknesses
- Lack of focus: Matterport’s solution can accommodate several needs, such as real estate search and discovery, lead generation, and customer engagement. The Company has failed to focus on one specific aspect; instead, it is trying to address many verticals simultaneously. This lack of focus can dilute its brand identity and undermine its market position.
- Slow market penetration: As of this writing, Matterport’s platform has 15 billion square feet of space. If the firm can complete 200 million square feet of content in the next year, it will achieve a mere one percent market penetration. This is because it takes considerable time for its platform to gain mass-market awareness and scale up operations.
Opportunities
- Vast un-scanned world: There are still countless spaces that have not been digitally documented. Although Matterport has a strong presence, there is still an opportunity to expand its market share further and capture the unaddressed market. An estimated four billion buildings worldwide valued at about $230 trillion are yet to be scanned. Innovative partnerships with other companies or developers can help Matterport capture this market.
- Expansion into emerging technologies: To sustain its position as a dominant player in the market, Matterport should expand its software ecosystem to include emerging technologies such as virtual reality. By exploring new avenues, Matterport can enhance its offering and stay competitive in the evolving technology space.
Threats
- High market volatility: The 3D/VR landscape is still in its infancy. Thus, it is characterized by significant uncertainties due to a lack of industry standards and consumer awareness about the technology. This makes it difficult for Matterport to forecast demand levels, resulting in over-provisioning or under-provisioning of resources.
- Competition from other sectors: The 3D/VR market is currently being targeted by various industries such as media and entertainment, real estate, healthcare, defense, aerospace, etc. Each vertical has an entirely different set of customer requirements that Matterport must appease to stay competitive. In addition, the arrival of disruptive technologies such as 5G is expected to reduce the cost of 3D/VR gear, making it more affordable for consumers. This can allow other players to gain a foothold in this market and compete with Matterport.
Matterport Competitor Analysis
Matterport competes in a highly dynamic environment with both large and small companies. To triumph, Matterport must have a plan in place to respond to market changes quickly. This section analysis some of Matterport’s competitors in terms of their market cap, revenues, product offerings, competitive advantages, and business strategies.
1. Zillow Group Inc.
Zillow Group Inc., [NASDAQ: Z] is a Seattle-based real estate market intelligence, and consumer brand focused on empowering consumers with data, inspiration, and knowledge around the place they call home. Zillow Group, Inc. had a market cap of $22.10 billion as of October 2021, with Q2 2021 revenues of $1.31 billion up 70 percent year over year.
The Company provides real estate search services, including information about homes for sale, neighborhood insights, price trends, and mortgage data. It also sells advertising spaces on Zillow Group websites to real estate agents. Furthermore, the firm provides valuation estimates through automated valuation models (AVM), also known as virtual appraisals.
Despite the extensive product offering across the real estate segment, Zillow Group remains active in the 3D space competing with Matterport in providing virtual walkthroughs for potential home buyers. Its major competitive advantage lies within its access to a significant amount of data on the real estate market.
While Zillow 3D tours provide an immersive but straightforward mobile application that enables users to create their 3D tours, it falls short in terms of features as the results are often just a scratch-off the surface. Matterport, on the other hand, allows users to create professional-grade 3D tours with advanced features such as panoramic views and detailed site/floor plans.
2. Autodesk Inc.
Autodesk, Inc. [NASDAQ: ADSK] provides a broad range of digital prototyping software. Its versatile suite allows companies to design products, visualize and simulate them virtually, and test them in real-world conditions. Autodesk, Inc. had a market cap of $60.674 billion as of October 2021, with Q2 2021 revenues of $913 million.
The Company provides 3D rendering software for architects, engineers, and designers to create digital prototypes, visualizations, and experiences. Autodesk’s portfolio includes AutoCAD, an industry-leading computer-aided design (CAD) software for 3D modeling, visualization, and drafting.
It competes with Matterport in providing immersive technology software for 3D and VR. Autodesk’s capabilities in offering digital prototyping services through its CAD design tools create a strong base for developing superior 3D/VR experiences. According to G2 verified reviews, users felt that Matterport was much easier to set up and navigate around. However, AutoCAD met the needs of their business better than Matterport.
It’s, however, essential to note that while Autodesk and Matterport are active competitors, their partnership to integrate Autodesk BIM 360 with Matterport creates synergies for both companies. The association enables faster decision-making by providing accurate 3D walkthroughs and models across the entire design and construction spectrum.
3. Cupix
Cupix is a cloud-based software solution that allows users to create virtual tours. The Company’s web-based ‘Interact’ platform uses a combination of 3D technology, interactive maps, and photos to create an immersive experience. Founded in 2015, Cupix has its headquarters in Bundang-gu, South Korea, with about 48 employees.
Despite being a newcomer in the industry, Cupix has a strong presence in the 3D space due to its ease of use and streamlined interface. Its continuous innovation in developing newer features and products, such as the CupixWorks 2.0, one of the most advanced 3D digital twin platforms, gives the Company an edge over its competitors.
Cupix is not a public traded company which means that the Company does not have to disclose detailed financial information. However, according to CrunchBase, the Company received $20.6 million after seven rounds of funding from 10 investors, including Murek Partners and K2 Investment Partners.
Matterport and Cupix compete as both companies offer 3D imaging and virtual tours to real estate businesses. While Matterport’s 3D technologies aim to create high-quality immersive experiences, Cupix is popular for its straightforward and easy-to-use interface.
Cupix is also a cheaper alternative to Matterport, which could help it gain an advantage in the market. However, it’s mainly present in South Korea and is yet to gain popularity in the North American market.
4. VPiX 360 Virtual Reality
VPiX 360 Virtual Reality is a graphics rendering company serving the global marketplace. Headquartered in Colorado, USA, VPiX provides virtual tours and interactive 3D simulations to clients worldwide. Founded in October 2000, VPiX is present in about 17 countries with about 40 employees.
VPiX creates marketable content for developers, commercial property developers, and real estate agents that help them sell properties without physically visiting the locations. The Company is a competitor to Matterport as both companies offer virtual tours and 3D imaging solutions.
Despite being an elder in the industry, VPiX does not have the same market share as Matterport. The Company isn’t publicly traded, which means that it does not have to disclose financial information. One of its significant competitive advantages is its lower prices than Matterport, making it an attractive option for low-cost companies.
5. TicketyView
TicketyView is a real estate technology company that provides 3D property tours to agents, developers, and media companies. The Company’s imaging technology uses a proprietary camera system to create accurate immersive 3D models. These models allow users to explore the space, climb staircases, and walk through properties without visiting them.
The Company was founded in 2014 and currently has its headquarters in Adelaide, Australia. TicketyView is a competitor to Matterport as both companies offer 3D virtual tours for real estate. TicketyView’s primary focus is to provide services to real estate agents and media companies, while Matterport targets commercial and residential clients.
While Matterport’s primary focus is on offering 3D imaging solutions, TicketyView emphasizes 3D virtual tours that companies can use for marketing. This approach has helped it capture the attention of companies in Australia and New Zealand. TicketyView’s technology, however, is yet to penetrate the North American market fully.
How Matterport Stands Out Against Its Competitors
Matterport delivers value to its clients by using 3D technologies that help them create high-quality immersive experiences. This happens through the entire lifecycle of the client’s project, including drafting, modeling, and rendering.
While partnerships with leading technology and consumer companies worldwide help Matterport deliver its services to a more extensive client base, the Company’s focus on delivering high-quality virtual experiences sets it apart from its competitors.
Matterport incorporates mixed marketing strategies to market its products, including using social media and collaborating with companies to provide Matterport’s services. This approach has helped Matterport gain significant market share in the virtual tours and 3D imaging industry.
While other companies in this industry compete with Matterport mainly in terms of price, the quality of its products is what matters most to clients. This is why Matterport has been able to win business from companies that long existed before it entered the market.
Matterport Competitor Analysis (FAQs)
Question: Does Matterport have competitors?
Answer: Matterport has competitors in the virtual tours marketplace. These include different market players offering 3D imaging technologies to various clients. Some of its top competitors include VPix, TicketyView, AutoCAD, and Zillow.
Question: Can Matterport be used with Zillow?
Answer: Zillow supports the integration of Matterport’s 3D virtual tours on its website. This allows Zillow users to get additional information about the properties they are browsing. The integration of Matterport’s virtual tours makes listings more appealing and compelling, which attracts more customers.
Question: Can you make money with Matterport?
Answer: Matterport has proven that it is possible to make money with its virtual tours. Companies are willing to pay for Matterport’s services because they get to market their properties in 3D. This helps them sell the property faster and generate more profits from the sale.
Conclusion
Matterport Inc. is the market leader due to its innovative technologies and services that help clients create high-quality virtual tours and 3D models. Its services cover the entire lifecycle of projects, including 3D modeling, virtual reality rendering, and post-processing. However, the Company faces stiff competition from similar companies like VPiX and TicketyView. Matterport’s competitive advantages include its focus on high-quality output and the use of mixed marketing strategies to promote its services worldwide.
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