Returns as of 10/03/2021
Returns as of 10/03/2021
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I think one of the most exciting technology stocks today is Matterport (NASDAQ:MTTR), the spatial data company that hit public markets earlier this year. With Matterport, a user can capture the spatial data of a room, building, or public space with either a specialized camera or most smartphone cameras. That builds what the company calls a “dollhouse,” which is essentially a virtual model of a space (shown below).
Once the dollhouse is created, the data can be put to a variety of uses. The number of light bulbs can be counted, room size can be calculated, and virtual furniture can even be added. The company is starting to build out some functionality, but this is a platform that will grow as developers learn what to do with that data, which could ultimately drive Matterport’s growth for decades.
A Matterport “dollhouse” showing an industrial building. Image source: Matterport.
I like to think of Matterport as a real estate data platform. The company is building the capability to capture spatial data, but that’s little more than a fun visual set without the tools to use it.
This is where Matterport’s platform vision comes into play. When you see your first dollhouse, it’s easy to imagine what it could be used for. Real estate showings are an obvious use, but remember that the platform is capturing spatial data, including measurements from a point, not just images.
As the data-capture technology company and repository, Matterport won’t likely capture all the value it can provide. That’s why it’s opening up development tools like application programming interfaces, software development kits, and an app store so that developers can build tools to bring the data to life.
There are two ways I like to think about the company’s growth opportunities. One is developers building tools into Matterport Showcase. These could be tools built and sold on the platform, or more likely tools built on another site with access to Matterport.
An example of this would be a real estate company accessing Matterport 3D Showcase on its site and including tools like 3D object insertion for virtual staging or even videoconferencing for virtual tours.
As more tools are developed, we’ll see the app itself come to life. In an interview with CEO RJ Pittman earlier this year, he indicated that we’ll likely see something like an app store within Matterport, allowing teams to purchase productivity tools that developers have built, similar to how the Shopify app store allows developers to build tools into its platform.
A Matterport dollhouse view. Image source: Matterport.
The true disruption the company enables could come from developers building tools on top of spatial data. Think of this as new businesses being built because millions of spaces have been captured by Matterport, making the company a true platform.
Apex Tech Solutions is a store survey service for large retailers that allows companies to understand what’s in each location. Apex says it’s “powered by Matterport,” but it’s really a business that’s built on top of Matterport technology, including custom solutions for Apex.
Verisk (NASDAQ:VRSK) is using Matterport TruePlan for Xactimate to generate diagrams of loss sites for insurance purposes. This is an insurance product, and given the value Matterport’s data could provide to the insurance industry, I think we’ll see this use case grow.
A start-up that Matterport is both powering and investing in is Simlab, a company building digitization tools for architecture, engineering, and construction teams. The company’s digital tools can walk through a construction process, integrate with building information modeling, and more. As the company’s tools improve, this could be a great documentation tool during any construction process.
Where I think Matterport will show its true value is in developers finding ways to use the data the company is generating and build businesses on top of it. We could see that in construction, insurance, remodeling, and even furniture sales. The possibilities given the millions of spaces in the world are almost endless.
Matterport’s potential isn’t in consumers paying for subscriptions to have a “dollhouse” of their home, it’s in businesses building productivity tools within or on top of its data. As business partners learn how to use these tools and where the most value lies, I think this is a growth stock that will accelerate its momentum.
Matterport is in its early days as a business, and I think this is a name we’ll see popping up in our everyday lives more and more over the next decade as a platform other businesses are using to create value.
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Stock Advisor launched in February of 2002. Returns as of 10/03/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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