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The future is bright for Quantify Technology (ASX:QFY): The leading provider of smart home tech
Source: Zimi
  • Quantify Technology (QFY) has announced a game-changing merger with Zimi, to become Australia's leading provider of smart home tech
  • Zimi, and its related Powermesh products, are owned by private South Australian group Gerard Private
  • The merger between Quantify and Zimi places it in an enviable position of being able to capture a large portion of the growing smart home tech market
  • Revenue from this market in Australia is projected to reach $1.8 billion this year alone
  • 21 per cent of all houses already contain smart technology, with that number expected to grow to 41 per cent by 2023
  • Both companies believe the merger will accelerate sales via cross-selling of products and also reduce costs by integrating the two teams
  • Shares in Quantify are currently trading for 0.2 cents each

The smart home technology market has a new leader in the pack, following Quantify Technology’s (QFY) recent game-changing merger with Zimi.

Under the newly announced merger, Quantify and Zimi will join forces and become Australia's leading provider of smart home technology.

Both companies will bring their own range of smart home products to the merger, expanding Quantify’s total reach in this multi-billion-dollar market.

Zimi

Looking at the two businesses, Zimi is the brainchild of Gerard Private, a private South Australian company which has over 100 years of experience in the electrical and lighting sector and in particular, pre-internet of things (IoT) automation control.

It created the Zimi platform, which consists of the Zimi App, Zimi Cloud Connect, and a wide range of Powermesh multi-purpose switches, power points, light dimmers, fan controllers & garage door devices — allowing users to control every aspect of their home.

Altogether, Zimi has sold 14,000 units over the 18 months and secured contracts with businesses such as Beacon Lighting, Trader and Steel-line.

Quantify

While Quantify’s range of smart dimmer and power outlets are similar to Zimi’s, its range of premium smart home products retail in the higher end of the market.

The qDevices allows consumers to completely control their homes and have been integrated with both Amazon and Google to make them voice-activated.

Quantify also has a contract with Harvey Norman’s smart home division, and sells its products to consumers, builders and electricians.

Market

Together, Quantify and Zimi are set to become leaders in the rapidly growing smart home technology space.

Smart home technology is essentially connecting everyday electrical devices in the home to both the internet and to each other — allowing them to be controlled from a device.

The most common and well known smart home tech is the smart speaker – such as Amazon’s Alexa, Google’s Home and Nest and Apple’s HomePod.

In Australia, revenue from the smart home market is projected to reach $1.8 billion this year alone, before growing an additional 16 per cent p.a. by 2023.

Household penetration is also expected to climb, from 21 per cent to 41 per cent of all houses to contain smart home tech by 2023.

Currently, the biggest drawback the smart home market faces is the prohibitive cost of getting involved, with the average custom automation system costing a household over $10,000.

But, by combining product ranges, Quantify will have a range of products for every budget, giving it access to a wider customer base.

Additionally, the merger also allows the two companies to create a single product platform.

This offers a number of benefits, including reducing costs, accelerating sales through cross-selling and more data to improve the overall customer experience.

It also allows Quantify to expand its licencing agreements, which in turn will allow the company to expand overseas.

The merger

Under the terms of the merger, Gerard Private will become Quantify’s largest, non-controlling shareholder.

Specifically, Quantify will acquire GSM Innovations (GSM-I) — Gerard Private's subsidiary, which owns the Zimi and Powermesh product suite.

Gerard Private’s CEO Simon Gerald and CTO Jordan Tentori will also strengthen the Quantify team by joining the board.

Quantify Technology CEO, Brett Savill, said he was confident this newly announced merger would lead to substantial growth.

"We have been looking for the right partner for some time and could not be more delighted to be working with Simon, Jordan and the Gerard Private Group," he said.

"It’s important to have multiple channels and a broad range of products. Quantify’s acquisition of Zimi is a real case of one plus one making three," he added.

While Gerard Private CEO, Simon Gerard, said this deal would position both companies at the forefront of the smart home market.

"When we founded GSM-I three years ago, I knew we needed access to third party capital to achieve our full potential. This acquisition provides not just capital but broadens the product range at the same time," he said.

"Electricians and other distributors are clamouring for reliable, cost-effective, and scalable Australian smart home automation which is what we deliver," he added.

Shares in QFY are currently trading for 0.2 cents each on Tuesday, October 6.


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