Metropolis Acquires Oosto in a $125M All-Stock Deal

Metropolis, a prominent AI-powered parking platform, has confirmed the acquisition of Oosto, formerly known as AnyVision, in an all-stock transaction valued at $125 million. The deal represents a significant markdown from the $380 million that Oosto raised from investors throughout its history, highlighting the challenges faced by some AI startups despite the growing interest in the sector.

Metropolis Acquires Oosto in a $125M All-Stock Deal
Metropolis Acquires Oosto in a $125M All-Stock Deal

Metropolis, a prominent AI-powered parking platform, has confirmed the acquisition of Oosto, formerly known as AnyVision, in an all-stock transaction valued at $125 million. The deal represents a significant markdown from the $380 million that Oosto raised from investors throughout its history, highlighting the challenges faced by some AI startups despite the growing interest in the sector.

The acquisition marks a pivotal step for Metropolis, which operates in over 4,000 locations and processes an estimated $5 billion in payments annually. Sources indicate that the company is currently fundraising at a valuation nearing $5 billion. As part of the acquisition, Oosto’s investors, including SoftBank, FifthWall, Lightspeed, DFJ, and Eldridge Industries, will receive Series D preferred stock in Metropolis. The deal also includes Oosto’s intellectual property and team, with CEO Avi Golan and CTO Dieter Joecker set to take senior roles at Metropolis.

In a statement, a Metropolis spokesperson said, “Metropolis, an artificial intelligence company whose computer vision platform enables checkout-free payment experiences for the real world, has agreed to acquire Oosto, the leading AI safety and security company.” The company plans to integrate elements of Oosto’s technology to enhance its existing offerings.

Oosto’s Tumultuous Journey

The acquisition follows years of turbulence for Oosto, a company known for its computer vision technology used in controversial surveillance applications. Reports revealed its technology was utilized by the Israeli government to monitor Palestinians, sparking criticism and leading to the withdrawal of Microsoft as a strategic investor. Despite these setbacks, Oosto secured substantial funding, including $235 million in 2021, led by SoftBank and Eldridge Industries.

In an effort to reposition itself, AnyVision rebranded as Oosto in 2021, emphasizing enterprise-focused solutions and announcing a partnership with Carnegie Mellon University. However, the company struggled to achieve sustainable growth, experiencing layoffs and parting ways with the university. Sources report that Oosto was generating approximately $20 million in annual revenue at the time of the acquisition.

Metropolis’ Strategic Integration Plan

Unlike Oosto, which faced challenges tied to its broader use cases, Metropolis maintains a focused approach, leveraging computer vision for parking management. Its technology automates the process of tracking vehicles entering and exiting parking spaces, streamlining payment processes. In 2023, Metropolis secured $1.7 billion in funding, primarily used to acquire SP Plus, another parking technology specialist, for $1.5 billion.

With the acquisition of Oosto, Metropolis aims to enhance its computer vision capabilities within parking environments. Over time, the company may expand to other applications involving vehicle and pedestrian movements in commercial spaces, such as drive-through operations.

Avihai Michaeli, a Tel Aviv-based investment advisor, noted the synergy between the two companies, stating, “Tech-wise this acquisition makes the perfect sense. Both Metropolis and Oosto are key players in the AI-driven computer vision and security solutions space, with applications that enhance urban management, public safety, and automation.” He also highlighted the difficulties faced by Israeli companies amid ongoing geopolitical tensions, which may have influenced Oosto’s sale.

A Cautionary Tale for AI Startups

The trajectory of Oosto serves as a reminder of the risks faced by AI startups, especially those operating in ethically sensitive areas. While some companies secure massive valuations, their ability to generate consistent revenues and achieve profitability remains a pressing challenge. For Metropolis, the acquisition of Oosto represents a calculated move to strengthen its core business through targeted innovation, avoiding the pitfalls that plagued its predecessor.