Metropolis, an AI-powered parking platform, has announced that it successfully secured $1.7 billion in funding for the acquisition of SP Plus, a provider of parking facility management services. This substantial funding comes through a combination of equity and debt.
The funding round was co-led by Eldridge Capital and 3L Capital, with participation from BDT & MSD Partners’ affiliated credit funds, Vista Credit Partners, Temasek, Slow Ventures, and Assembly Ventures. As part of this financing, Metropolis will take on $650 million in loans and $1.05 billion in Series C preferred stock financing.
Metropolis will pay approximately $1.5 billion to acquire SP Plus while maintaining a significant amount of capital on its balance sheet, as stated by Metropolis co-founder and CEO Alex Israel. Prior to this funding round, Metropolis had raised a total of $226 million.
Israel emphasized the transformative nature of the acquisition, highlighting SP Plus’ operational excellence, talented leadership team, and high customer satisfaction levels. The combined platform aims to bring seamless, checkout-free payment experiences to consumers.
Metropolis, founded by Alex Israel in 2017, equips existing parking structures with a computer vision system, allowing customers to enter and exit without the need to swipe a credit card or use cash. Users provide their name, license plate, phone number, and payment method, and they can monitor their visit and pricing in real-time through a mobile app. Metropolis automatically tracks and charges vehicle owners, sending receipts via email after their departure.
With the acquisition of SP Plus, Metropolis gains access to an established, publicly traded business with a substantial parking presence in the United States and Canada. SP Plus owns over two million parking spaces and manages more than 3,300 parking facilities, along with parking and shuttle bus operations at 160 airports.
This acquisition represents another step towards vertical integration for Metropolis, which had already powered around 600 parking facilities by June 2022. With the addition of Premier Parking and now SP Plus, Metropolis claims operations in over 360 cities, serving millions of customers and processing over $4 billion in payments annually.
Metropolis envisions expanding its technology beyond parking facilities, potentially offering checkout-free transactions at places like gas and electric vehicle charging stations, drive-thrus, car washes, and retail stores. The company also focuses on analytics, sales, and marketing, using data insights to inform staffing, pricing, and maintenance at parking facilities, while partnering with local businesses for in-app promotions.
The acquisition, at $54 per share in cash, will take SP Plus private and represents a 52% premium over SP Plus’ closing stock price on October 4. The transaction has received unanimous approval from the boards of directors of both Metropolis and SP Plus and is expected to close in 2024, subject to customary closing conditions, regulatory approvals, and SP Plus’ stockholder approval.
The exact number of SP Plus team members who will join Metropolis’ workforce, which currently comprises around 2,000 employees based in Los Angeles, remains uncertain following the deal.
