Google is acquiring connected device company Nest for $3.2 billion. Google sent out an email to employees noting the acquisition today and later issued a press release.
In the release, Google noted that Nest has been offering its best-selling thermostat since 2011 and recently began offering the Protect smoke alarm, which networks with its other devices.
Nest Founders Tony Fadell and Matt Rogers will both join Google. Rogers was one of the first engineers on the iPhone team at Apple.
“They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe,” said Google CEO Larry Page in a statement. “We are excited to bring great experiences to more homes in more countries and fulfill their dreams!”
Fadell, who is known as the ‘father of the iPod’, said that they’re ‘thrilled to join Google.’ “With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.”
Nest will continue on as its ‘own brand identity’ and continue to be led by Fadell. The deal hasn’t closed yet as it has to meet regulatory approval.
Nest founders Fadell and Rogers also sent an emailed statement to TechCrunch about why Nest chose to go ahead with the acquisition.
“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” Fadell says. “Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes.”
Fadell says that this decision was not made hastily. He says that at the 2011 TED conference — even before Nest had launched — he and Nest VP of business Erik Charlton had ‘huddled’ together in a corner with Google’s Brin to show him a video and early model of the Nest thermostat.
He instantly got what we were doing and so did the rest of the Google team when we showed them. In May 2011, Google Ventures led our Series B round of financing, and in 2012, Series C. Time and time again, Googlers have shown themselves to be incredibly like-minded, supportive and as big of dreamers as we are. I know that joining Google will be an easy transition because we’re partnering with a company that gets what we do and who we are at Nest – and wants us to stay that way.
We’ve been hearing rumors about Nest getting courted with large billion-dollar acquisition offers for months now, but a Google buy is a definite statement. The company has been fairly serious about its connected device efforts for a while but hasn’t quite been able to get anything to gel. For instance, there have been some abortive attempts at connected devices like Android at Home in the past. But Nest already has a nice start in producing well-designed and connected home devices — something that Google should be able to build off of in the future.
Peter Nieh, a partner at Nest investor Lightspeed Venture Partners, has a post up about his early days working with Fadell at startup General Magic and what Nest has done since. He also shared a photo of the pair from 1992:
Nieh says that though he was excited to work with Fadell again when it came time to invest in Nest, “…our excitement went off the charts when we met Matt Rogers, Tony’s co-founder, who was responsible at Apple for iPod software development and one of the first engineers on the original iPhone team. We would have invested had they been looking to start a food truck.”
We reached out to Nieh for more thoughts, and he told TechCrunch that “Nest is a very special company — it’s a combination of an incredible team led by Tony and Matt, world-changing vision, and world-class execution.
“The acquisition by Google is just a milestone along the way as they continue their quest to change the world,” he added. “I can’t wait to see how they will continue to bring magic to all those unloved things in our homes.”
Google has previously been rumored to be investigating ramping up its own smart thermostat efforts, but this would likely supplant that — or the Nest team would take those projects over. Google also has an interesting project called PowerMeter which monitors power consumption over time which could have some cool applications here.
The acquisition could also provide a patent boost of some sort for Google. In December, Nest said that it had 100 patents granted, with 200 more on file with the U.S. Patent Office and another 200 ready to file. Nest has been the target of some fairly high-profile patent suits and threats from legacy manufacturers like Honeywell over its thermostat and BRK over its Protect smoke detector. Google will likely offer shelter from further suits with its wide range of patents across a variety of technology arenas.
As far as how much autonomy Fadell will have to execute on his vision of what Nest can be, it doesn’t make a lot of sense for Google to derail a business that — by most counts — was fairly successful already. And had been garnering praise from consumers over design. It could help with infrastructure problems that have cause failed firmware upgrades which resulted in complaints recently.
There’s also bound to be an immediate and visceral reaction to the access that Google will now have to information about when you’re home, which rooms you’re in and more. Which is why Nest also issued a Q&A about what will happen to users now that Google owns their thermostats and smoke detectors:
Will Nest continue to support iOS so I can have the Nest app on my iPhone or iPad?
Yes, absolutely. We’ll continue supporting iOS, Android and modern web browsers so you can check in on your home and control the temperature from wherever you are.
Will Nest and Google products work with each other?
Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.
What will happen to the Nest warranties on products?
No change there – we stand behind our products like we always have.
Will I still be able to find Nest products at my local retailer?
You bet. We intend to continue selling through the same partners in the US, Canada and the UK.
Will Nest customer data be shared with Google?
That answer is a bit vague, but the concerns over the recent revelations of enormous data gathering efforts on the part of the NSA should definitely cause some to worry. Whether or not Google chooses to share information voluntarily, it’s still a big target for those looking to hoover up vast swaths of data about its users, and that will only be more likely as time goes on, not less.
San Francisco-based startup and Y Combinator Winter 2013 class member Swapbox has raised $800,000 in seed funding, led by Tony Hsieh’s Vegas Tech Fund investment vehicle and including Fuel Capital, YC founder Trevor Blackwell, Base Ventures and Ace & Company. The startup is hoping to cash in on the rise of ecommerce and home delivery, with shared, centrally located delivery lockers so people never miss a package again.
Swapbox isn’t alone with that aim, and it’s pitting itself against some heavy hitters; both Google and Amazon already have delivery pick-up initiatives in place, Amazon via its Lockers programs in select cities, and Google through BufferBox, a Waterloo-based startup it acquired last year. BufferBox recently went live in San Francisco, where it has packages accepted by local businesses. Swapbox co-founder and CEO Neel Murthy thinks there’s still room for a startup in the space, however.
“We accept any packages from anywhere. Shop online, we give you a new address and you just ship to that address,” he said in an interview. “It’s an independent platform that works for all the other ecommerce players.”
The service is piloting in SF, where it has 15 locations currently. Each consists of heavily modified gym lockers located at businesses around the city, and Murthy says they’ve paid special attention to industrial design with their physical hardware, in order to help with branding. The plan is to expand to surrounding areas near SF within the next year, and then look further afield soon after. Swapbox has different arrangements with its location partners, but most involve some kind of rev share of the service fee paid for by its users.
The business as it stands looks like a prime target for some other online retailer hoping to keep up with Amazon and Google to gobble up, but Murthy says they’ve built Swapbox as a long-term play. There’s plenty they’re planning to add later on, and the intent is to hopefully move the burden of cost from the consumer to the ecommerce players once they get enough scale. There’s also a plan to use Swapbox’s capabilities to essentially build in a type of escro for small merchants and private sale deals, Murthy says.
That would work by allowing sellers, on Craigslist for example, to use the Swapbox locations to exchange goods, with a seller controlling access for a buyer based on when payment clears. It takes out any of the uncertainty around meeting a total stranger online with a wad of cash or expensive gadget in their pocket. The escrow play could extend beyond just the private exchange scenario in theory, too.
Swapbox chose its investors mostly for their value as strategic partners, according to Murthy, and Zappos founder Tony Hsieh is a very strategic one indeed for a company this tied to online commerce. Google and Amazon may have a head start on automated delivery, but there’s definitely room for an open platform to serve everyone else, and Swapbox could be the one to step up in that role.
Google has acquired the French startup FlexyCore, which is best known for its Android performance boosting solution DroidBooster. Terms of the deal remain undisclosed, although France's L'Expansion, which first reported the acquisition, has pegged the price at $23 million.
Google has confirmed the purchase, citing FlexyCore's strong team and “expertise in building software to optimize Android device performance”. In fact, the startup's team has already been integrated with Google's Android team, while the acquisition has been a year in the making, having started last September and been concluded earlier this month, apparently. That's quite a protracted acquisition, even by the slowest of European standards, and especially for what looks in-part like an acqui-hire.
Five year-old FlexyCore's main product, DroidBooster, is designed to boost the performance of Android devices, in terms of speed and battery life - both of which are crucial to the competitiveness of any modern-day smartphone platform as device makers compete in the performance arms race associated with our always-on digital lives. It claims to be able to boost the performance of ARM-based devices by up to ten times, and does this by improving the performance of an Android handset at build-time by “generating highly optimized ARM binary from Dalvik code”.
The technology was being targeted by FlexyCore at both high and low end devices, citing handset makers' ability to introduce new Android features or extend existing ones. It was also being pitched as a way to bring “high end performance to low end devices”, enabling Android to “break into the mass market”, which of course it has since done. However, an essential growth market for Google's OS is emerging markets, and anything that can push high end performance to ever lower price points is bound to ring the cash registers at Mountain View.
FlexyCore was originally supported by french state-backed incubator Emergys, and has raised 1.5 million Euros from Paris-based VC Sochrastem, so if L'Expansion's $23 million price is on the nail, this looks like a pretty decent exit for a French company, presuming all previous funding was disclosed, and including any earn-outs.
Google, SAP, Cisco & Samsung Among Potential Tech Buyers For Some Or All Of BlackBerry, Says Reuters
Google, SAP and Cisco are among a number of technology companies interested in buying up portions — or all — of BlackBerry’s business, according to Reuters, which cites several sources close to the matter. BlackBerry has also apparently asked for preliminary expressions from Intel, LG and Samsung, by early next week. Portions of the business of most interest to potential technology buyers are BlackBerry’s secure server network and patent portfolio, according to the sources.
None of the companies named by Reuters provided comment on its report.
Other tech companies, including Microsoft, Huawei and Lenovo, are notably absent from the list of prospective buyers. Redmond unsurprisingly so; despite being previously linked with a possible BlackBerry bid, Microsoft is now tied up with its own $7.2 billion bid for Nokia’s Devices & Services business. Meanwhile Chinese telco Huawei has faced difficulties in the North American market over national security concerns about links to the Chinese military — likely making a bid for a company that supplies phones to government officials a difficult sell.
An enterprise-focused bidder — such as SAP or Cisco — might make the best fit for BlackBerry’s security-focused messaging handset business at this point, with the consumer smartphone marketplace now primarily centred on Android and iOS. That said, the BYOD trend has been steadily eroding BlackBerry’s enterprise reach, so even here its appeal is increasingly niche. (Albeit, it does have its own mobile device management software that seeks to tap the BYOD trend, with the ability to manage iPhones, Android-powered devices and BlackBerrys).
Late last month, days before BlackBerry reported a $965 million quarterly loss (due mostly to a writedown on unsold Z10 devices), it signed a letter of intent to go private. Its largest shareholder, Fairfax Financial Holdings, is the prospective buyer, tabling a $4.7 billion bid for the company.
Going private also opens up the possibility that a new owner might look to break up the company and sell off its constituent parts, although Fairfax claims it has no plans to do so. But, according to Reuters, BlackBerry is actively shopping itself around to potential strategic buyers anyway — as an alternative to the Fairfax deal. That deal, which values the company at $9 per share, has faced some skepticism from financial analysts — who believe a $7 per share price is more realistic — which may explain why BlackBerry is apparently looking elsewhere now.
Technology buyers are not the only potential bidders for the BlackBerry pie, with private-equity firms also asking the company to provide additional financial details about its various business segments, according to two of Reuters’ sources. However they said BlackBerry is currently focused on taking bids from industry peers.
Despite Google et al apparently agreeing to talk, it’s unclear how much serious interest there is in buying BlackBerry or which, if any, parties will bid. Potential bidders are apparently proceeding with caution, given the level of uncertainty around BlackBerry’s business and questions over the future value of its business assets.
Google’s interest is likely to be in BlackBerry’s patent portfolio. Android has faced renewed legal attacks in recent weeks, with Nokia’s lawyers scoring a preliminary win against HTC‘s Android-powered One flagship device in the U.S. last week. Google’s 2011 acquisition of Motorola was also widely touted as a patent-focused purchase aimed at bolstering Android’s IP defences. So it’s due diligence for Mountain View to at least take a closer look at BlackBerry’s patents. Samsung may also be eyeing those.
However, Reuters notes that the value of BlackBerry’s patent portfolio and licensing agreements is diminishing rapidly — likely to halve over the next 18 months. Which may temper any interest there.
BlackBerry’s patents are estimated to be worth between $2 billion and $3 billion, and its security-focused messaging system services business is likely worth $3 billion to $4.5 billion. The company also has $3.1 billion in cash and investments — however with revenues sliding and more loss-making quarters looming, that cash is going to get eaten up pretty quickly. Reuters cites Bernstein analyst Pierre Ferragu’s prediction that the company will burn through almost $2 billion over the next year and a half.
Meanwhile, BlackBerry’s long-touted plan to extend the reach of its consumer mobile messaging service, BBM, to Android and iOS – perhaps with the hope of creating another business asset it could shop around to buyers – has stalled.
BBM was initially slated to launch on the new platforms globally late last month but the rollout was halted after a leaked version of the Android .apk overloaded its servers. The company has since said it remains committed to launching BBM on Android and iOS but given no new timeframe for when this will happen. In the event, it may be that BlackBerry’s bits get broken up and sold off before BBM is able to make the leap onto other platforms.
Google’s Glass, Android and other products may soon be picking up more Kinect-style gesture features: the company has bought Flutter, a Y Combinator-backed startup that focuses on gesture recognition technology. Its first and only product — an app that provides gesture detection and recognition from standard webcam devices — will remain live and operational, the company says.
Terms of the deal were not disclosed but we have heard that the price was around $40 million.
Flutter confirmed the news on its site, where it said it will continue to offer its app — it currently has a Mac app — while it also works on research at Google. “We are thrilled to announce that we will be continuing our research at Google. We share Google’s passion for 10x thinking, and we’re excited to add their rocket fuel to our journey,” Navneet Dalal, one of the co-founders, writes. (Nice gaming reference, Navneet!) The full note follows below.
That Mac app (which, btw, added Chrome support in February) clearly struck a chord, with downloads in more than 90 countries, reaching the top-five apps in the Mac App Store in its first two weeks of launch in some 30 of those, and number 1 in 14. It had around 1 million users on desktop.
Flutter had been planning to launch a new product in August, we understand, but that plan abruptly got delayed. Today’s news gives us a clue why. What was that product? Likely a Windows version, which was already in private alpha; or an enhanced Mac version with more features — which was also in the works, as Dalal and his co-founder Mehul Nariyawala noted to Colleen last year.
Flutter was in the YC winter class of 2012, and had raised $1.4 million in seed funding from Andreessen Horowitz,NEA, and Spring Ventures, along with Start Fund and a handful of individual angel investors.
Gesture technology is a big area these days, with services such as those from Microsoft and the Kinect, along with other products like the Leap Motion sensor bringing the concept into the mainstream. Others that are also investing further in gesture technology include Intel’s acquisition of Omek. Apple, meanwhile, has yet to make a move here but there have been rumors that it will, too.
It’s unclear if Google will keep Flutter working on standalone apps, or whether the technology will get integrated further into its own software and hardware. For now, a Google spokesperson had this to say:
“We’re really impressed by the Flutter team’s ability to design new technology based on cutting-edge research. We look forward to supporting and collaborating on their research efforts at Google.”
Here’s the full note from Flutter announcing the sale and a video of Flutter from its launch:
When we started three years ago, our dream to build a ubiquitous and power-efficient gesture recognition technology was considered by many as just “a dream”, not a real possibility. Since then, we have strived to build the best machine vision algorithms and a delightful user experience.
Even after we launched our first app, we didn’t stop our research; your enthusiasm and support pushed us to continue to do better. We’re inspired everyday when we hear, for example, that Flutter makes you feel like a superhero — because any sufficiently advanced technology should be indistinguishable from magic, right?
Today, we are thrilled to announce that we will be continuing our research at Google. We share Google’s passion for 10x thinking, and we’re excited to add their rocket fuel to our journey.
We’d like to extend a special thank you to all of our users; your feedback and evangelism inspire us every day. Flutter users will be able to continue to use the app, and stay tuned for future updates.