Private company REEF Technology is a start-up focussed on transforming urban environments. And it begins with the unassuming parking lot. The revelation that 50% to 60% of US downtown real estate is used for car parking spaces, propelled REEF Technology to consider alternative uses for all this dormant space. And what it has done is redesign and transform the humble parking lot into a community hub. A place where people can connect with the people, business, services and experiences that make a locality thrive.
REEF Technology began in 2013 as ParkJockey, a parking lot management firm. Its new-fangled hardware and software technologies revolutionized the parking industry. Acting as a go-between, ParkJockey helps parking operators streamline their operations and gives drivers a simple way to find the optimal parking space using its One touch parking™ solution.
REEF Technology has since expanded its business model to influence the management of parking bays in a new and improved fashion. It now has a stream of alternative assets under management, and there’s a lot to like about its savvy new business model.
It utilises the parking spaces for hosting pop-up shops, that streamline the delivery process from supplier to consumer in record time. With a key focus on ‘proximity’ it plays the middleman, connecting small and medium-sized businesses with their end users.
It also commandeers the help of other delivery agents such as Uber Eats, DoorDash, GrubHub, Deliveroo and Postmates. It leverages its relationships with these entities to build customer relationships and gain an overview of trending demands.
Having a unique supply of something that consumers want has very much been at the forefront of its success so far. Its power lies in its ability to create digital storefronts at lightning speed to respond to this demand. It builds out this digital brand, storefront and presence, utilising SEO and paid advertising to target consumers directly.
REEF Technology can invent a new brand at the drop of a hat, create digital store fronts and deliver to consumers on-demand. In recent months it’s done this with its ice cream delivery business ‘Neighborhood Scoops’ and before that, grocery delivery service ‘Stock-Up Mart’.
REEF Technology keeps its finger on the pulse, watching closely for where demand lies. Noticing a surge in demand for 10pm ice cream brought ‘Neighborhood Scoops’ to fruition. It also rapidly responded to the demand for face masks and toilet roll at the beginning of the pandemic when chaos in the shops ensued.
It was again quick to realise the need for rapid Covid-19 testing and self-funded testing sites to get things up and running as quickly as possible. It had the locations and the labour force but needed partnerships. Thankfully, its professional setup and tech savvy appearance helped it swiftly cement relationships with a large US laboratory.
Shortly after this it transitioned into healthcare, which it believes is now an area with massive scope for expansion. In a digitally connected world, people expect to get their goods delivered on-demand and pharmaceuticals are no different. It could revolutionise routine healthcare appointments in many areas. Considering the pandemic only really took hold nine months ago, REEF Technology has made incredible achievements in a very short space of time.
If REEF is supplying something sought after, buyers will come. But its strategy is very much customer focused and keeps the end user in mind every step of the way. Most of all, it strives for a super-simple checkout process. It even has internal teams dedicated to testing the user experience (UX), requesting feedback, submitting surveys, etc
Saving Space and Time
REEF Technology was already transitioning prior to Covid-19 arising. At first this looked to throw a major spanner in the works, but quickly the company saw the opportunity that lay before them. Consumers were crying out to have goods delivered and REEF Technology had the setup and know-how already in place, making it very simple to rapidly step up to the plate. So, from the success of the parking lot connectivity, the transition to pop-up industrial kitchens gave way to a middle-space for companies to meet their consumer needs.
REEF Technology’s unique selling point is this buzzword ‘proximity’. The closeness of consumers to their desires, be that fresh food, groceries, healthcare or package deliveries. Utilising car parking spaces means it puts the service at the heart of the neighbourhood. Ensuring consumers receive what they’re after in record time. Its vision is to be the ecosystem that connects the world to your block. And it’s now putting parking lots to new uses while simultaneously operating and profiting from its own stream of businesses.
Its ecosystem comprises 4,500 locations and a team of 15,000 people throughout the United States, Canada, and gradually Europe.
The ‘ghost kitchen model’ had been emerging before Covid-19, but the pandemic propelled its scale. It is now exploring concepts around EV charging and always enabling alternative ways of delivering things that consumers want to purchase. It is also venturing into the vertical farming space, which is a high-tech way of in-city farming, using data to drastically cut down on water usage, among other traditional farming constraints.
$700 Million Fund Raise
In recent weeks, REEF Technology has raised $700 million through a funding round including backing from the SoftBank Group Corp (TYO: 9984) and UAE investment company Mubadala Corp. This is not the first time these investors have stumped up cash. In December 2018, SoftBank Vision Fund invested $500m, pushing Parkjockey’s valuation over $1 billion. Around this time it also acquired Citizens Parking and Impark in partnership with Mubadala, thereby significantly boosting its parking real estate.
Then 18 months ago Parkjockey rebranded as REEF Technology. It wanted to implement its ambitious vision to transform empty parking spaces into economic hubs of activity. The pandemic undoubtedly speeded this up exponentially.
SoftBank was recently burned chasing the WeWork dream, and REEF Technology doesn’t seem so very different, but perhaps it offers more staying power with the added benefit of sustainability. WeWork’s was a highly speculated IPO that never happened. The company turned out to be losing a fortune, and its CEO was caught up in a series of scandals. REEF Technology has a more wholesome image and thriving in a pandemic could give it roots that are missing from those businesses that crumble under pressure. Despite the negative criticism SoftBank received for its WeWork stance, its share price has rebounded 169% since its March market crash low and it believes it will be cash flow positive in 2021.
According to Crunchbase data, Oaktree Capital Management (NYSE: OAK-B), UBS Asset Management and Target Global are also invested.
The backing of these private equity and venture capitalist firms makes this a company to watch for a potential public flotation in the future.
The Rise of Urbanization
Prior to the pandemic, it was estimated that two-thirds of the global population will live in cities by 2050. If this continues to be the case, most cities are far from prepared. Years of underfunding and poor governance have led many cities to deteriorate. Innovation is providing solutions, but it will take capital and regulatory approval to implement. This is where REEF Technology seems to have sidestepped the norm and created a savvy solution to imminent problems, while generating a wealth of goodness in the process.
On the other side of the coin, people may leave the cities in droves and the two-thirds prediction may never come to pass. Covid-19 has created a work-from-home revolution encouraging people to re-evaluate their lives. For many, this means leaving the confines of city life for the freedom of rural living. But for others, the convenience and buzz of city life may always be preferable.
The flexibility of REEF Technology’s game plan gives it scope to last. It’s making better use of existing infrastructure while meeting consumer needs. This seems to be a win-win for all involved.