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Billion Dollar Unicorns: SMS Assist Brings a Lackluster Industry to the Club

Posted on Wednesday, Jul 13th 2016

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According to a Markets and Markets report, the global facility management market is estimated to be worth $49.44 Billion by 2020. The industry is expected to grow 13% annually over the five-year period from 2015 through 2020. The industry was pegged at $27.25 billion in 2015. Chicago’s SMS Assist is among the leading players in the industry that entered the Billion Dollar Unicorn club recently.

SMS Assist’s Offerings

SMS Assist was founded in 1999 by Stephen Watkins and Michael Rothman. Prior to setting up SMS Assist, Michael had founded and sold two other companies, both of them in the industrial services space. SMS Assist is a technology company that helps in multisite property management. Its platform helps connect companies in 120,000 locations with a network of over 20,000 subcontractor affiliates and 500,000 technicians. Its customer list includes names like Family Dollar, JPMorgan Chase, Jones Lang LaSalle Incorporated, O’Reilly Automotive, Inc., and Colony Starwood Homes.

Mike founded SMS Assist with the intention of leveraging technology to make the facilities maintenance business more efficient. Initially SMS Assist was incorporated as a floor care company with only 10 employees. In 2005, it launched its first proprietary technology platform Service Track. Today, it has expanded beyond basic floor care into other property management services, such as snow and ice management, landscaping, parking lot maintenance, electrical, plumbing, carpentry, and mechanical repairs.

Through its network of contractor affiliates, it is able to offer the benefits of economies of scale to its clients. Customers are also able to leverage its analytics tool that help with root-cause resolution, real-time visibility into spend, quality assurance, and service verification. Its platform also builds in customized rules such as maintenance schedules along with the ability to place work order requests and process invoices. It connects property managers with outside vendors through its cloud-based platform and allows service providers to take pictures with their phone before and after the work is done and submit them to the property manager for approval, invoicing, rating, and feedback.

SMS Assist’s Financials

SMS Assist is privately held and does not disclose its detailed financials. It claims to have “hundreds of millions in sales and is profitable”. It has raised $255 million in funding so far. It was venture funded in the early days and got its first infusion of venture funds in 2011 when it raised $15 million from Pritzker Group Venture Capital at an undisclosed valuation. Since then, the company has raised another $240 million from investors including Goldman Sachs, Insight Venture Partners, and Jumpstart Ventures. Its last funding round was held in June this year when it raised $150 million from Goldman Sachs at a valuation of $1 billion. The valuation is estimated to have doubled within a year. The company plans to use the latest funds to improve its technology and capabilities.

Is the valuation justified? I have no idea. These Unicorns should start releasing some financial metrics, otherwise, they smell fishy and unconvincing.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Photo Credit: Emilio Labrador / Flickr.com

This segment is a part in the series : Billion Dollar Unicorns


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. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 1)
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