CoStar to acquire Calif. tech company in $1.6B deal

The CoStar Group, which announced in February plans to move its headquarters from Washington, D.C., to Arlington County, has reached an agreement to buy all outstanding shares of California-based Matterport, a 3D data platform, in a cash and stock deal valued at $1.6 billion.

A real estate analytics and data company known for online real estate marketplaces Apartments.com and Homes.com, CoStar Group will pay $5.50 per share — $2.75 in cash and $2.75 in CoStar Group stock — for each share of Matterport common stock, CoStar Group announced Monday.

Matterport is headquartered in Sunnyvale, California, and has approximately 440 employees. Revenue for  2023 was $158 million, representing growth of 16% on a year-over-year basis compared with 2022. CoStar Group officials will provide more details on the acquisition during its earnings call Tuesday, according to the announcement.

“The world has changed and today a Matterport is the new open house or property tour,” Andy Florance, founder and CEO of CoStar Group, said in a statement. “People now select their next home, apartment, office, store, hotel or warehouse on their mobile devices, often without ever visiting the property. There is no better way to remotely experience space than via Matterport.”

Florance went on to say that CoStar Group plans to invest in research and development to further develop Matterport’s technology “including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative artificial intelligence to imagine and reimagine physical spaces.”

Founded in 2011, Matterport developed 3D technology that creates “digital twins” or dimensionally accurate, photorealistic virtual tours of properties. Cameras found on most smartphones can take pictures of properties and use Matterport’s technology to digitize them. Matterport has captured over 12 million spaces in 177 countries.

Nearly every sector of real estate —from residential to hospitality and industrial — uses Matterport’s 3D technology, according to CoStar Group.

Cortex, Matterport’s artificial intelligence software engine, generates 3D digital twins and virtual tours of properties as well as detailed property dimensions and room layouts. Additionally, Matterport produces 3D capture devices that offer high-precision indoor and outdoor capture.

CoStar was an early adopter of Matterport technology and currently offers nearly 300,000 Matterport digital twins on its online property marketplaces. Consumers spend 20% more time looking an apartment on Apartments.com when Matterport 3D Tours are available, according to CoStar.

Matterport stockholders must agree to the deal and and it will require applicable regulatory approvals; however, CoStar Group expects the transaction to be completed during the year. Members of Matterport’s board of directors and others representing about 15% of the company’s fully diluted shares have agreed to the transaction.

About 500 CoStar employees will be relocated from downtown D.C. to Arlington County, where the company expects to occupy 150,000 square feet in late 2024. CoStar announced in February plans to add 150 jobs at the new headquarters, and the company also has a large presence in Richmond, where its $460 million expansion project is underway.