Scaling Through M&A Without Dilution: Spacers Use of Venture Debt

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Meet Spacer Technologies

Founded in 2015 in Australia and expanded to North America in 2017, Spacer Technologies was built on a simple observation. There is significant underutilised space sitting idle all around us.

Driveways. Garages. Church car parks. Small businesses.

Spacer connects those who have spare space with those who need it. Hosts earn consistent monthly income from assets that would otherwise sit idle. Drivers secure reliable long-term parking or storage close to home or work. It is a straightforward marketplace model with tangible value on both sides.

Spacer has grown into a portfolio of independent marketplaces across parking and storage.

Today the group includes:

• Spacer, the number one independent self-storage marketplace in Australia
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• Parkhound, focused on long term parking subscriptions
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• Where I Park, partnering with property owners to monetise idle parking
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• Chargehound, providing access to verified EV charging options across Australia

 At its core, Spacer exists to help asset owners monetise space that is less glamorous but equally valuable.

Scaling Through Targeted Acquisitions

Founders Michael Rosenbaum and Roland Tam have more than 20 years of experience in technology and M&A. From the beginning, they had a clear strategy for growth.

Grow organically from zero to one. Then use disciplined inorganic growth to move from one to ten, and ten to one hundred.

Spacer acquired Parkhound in 2017, expanding into parking after recognising it was an even greater pain point for customers than storage alone. The strategy was clear. Use digital marketing and marketplace expertise to scale efficiently, and layer in acquisitions where they accelerate category leadership.

In 2024, Spacer identified another opportunity. Scoop Commute, a carpooling app with more than 1,000 locations in key US markets.

The acquisition strengthened Spacer’s position in the 32-billion-dollar parking market and aligned with broader shifts back to office work. It enhanced employee benefits, reduced travel costs and supported more sustainable transport patterns.

Funding the Acquisition Without Dilution

Spacer partnered with Mighty Partners to fund the acquisition of Scoop Commute.

The decision was straightforward. The transaction was immediately accretive. The combined business could service repayments. The value creation was visible. Why issue equity to fund something that was going to increase enterprise value?

Funding an acquisition with growth credit is typically a decision made by founders who are confident in post-merger cash flows. If the acquired business generates more profit than the cost of interest, shareholders retain the upside.

There are several reasons why venture debt can be the more efficient tool for M&A.

1. Preserve Ownership: Equity requires selling a portion of the company to buy another. Founders end up owning a smaller percentage of a larger entity. With debt, the obligation is repaid over time. Once repaid,founders and existing shareholders retain full ownership of the combined upside.
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2.  Lower Cost of Capital: Equity is permanent and its true cost compounds as valuation grows. Debt has a defined cost. Interest and fees are known upfront. Once repaid, the obligation ends.
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3. Speed and Certainty: Equity processes can take months and involve extensive diligence and negotiation. M&A opportunities are often time sensitive. Structured debt can move quickly, allowing founders to execute while the window is open.
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4. Capture Value Arbitrage: If a business acquires revenue at a lower multiple than its own valuation, value is created at the point of transaction. Using debt to fund that spread ensures the uplift accrues to existing shareholders rather than being shared with new investors.

It is important to be clear. This approach only works where the pro forma business is stable and capable of servicing repayments. Discipline in underwriting and integration is critical. Debt remains on the balance sheet regardless of integration outcomes.

Achievements

Since partnering with Mighty and completing the acquisition of Scoop Commute, Spacer has expanded its US footprint, increased revenue by 49% in 18 months and is operating profitably.

The acquisition accelerated growth. The capital structure protected ownership.

If you are evaluating an acquisition, expansion into a new market or entry into a new category and you are confident in the return profile, speak with the Mighty team to assess fit and structure a facility aligned to your growth objectives.

View our Venture Debt page for more information on our funding mandate and requirements.