Samsung Buys SmartThings to Plunge into the ‘Internet of Things’
As predicted by TechCrunch a month ago, Samsung has bought smart-home startup “SmartThings” that makes household items like locks, lights and windows which are connected to the Internet and provide greater control to the users. The fee is not disclosed by both companies but it is reported that the South Korean company paid about $200 million.
SmartThings works on home automation by manufacturing internet-connected things making homes smart. For example, they provide a camera which can be mounted on the wall. It will detect unexpected movement and send you photos through your Wi-Fi. Similarly, they manufacture windows and doors that send notifications to the house owner when they are opened unexpectedly. Other smart items include thermostat, keys, lights, coffee machine and many others.
SmartThings has raised over $15 million from investors including First Round Capital, SV Angel, David Tisch, Lerer Ventures, A-Grade Investments, Highland Capital, CrunchFund, Greylock, Box Group, and Yuri Milner’s Start Fund.
Samsung’s newly bought startup will still operate independently under CEO and founder of SmartThings Alex Hawkinson. As a result of the deal between the two companies, most of the operations of SmartThings will be moved to Palo Alto, California from Washington, D.C., San Francisco and Minnesota.
It is believed that Samsung has bought this startup to compete with Google’s Nest and Apple’s HomeKit. Samsung has seen decline in sales recently and has realized that depending on smartphones and other electronic devices is not enough. They need a strong startup with future in need of marketing. So SmartThings is the perfect match for them.
“SmartThings sells kits, for just under $200, that include a basic router and small adhesive sensors. The sensors attach to various objects in your home and, ultimately, connect to your Wi-Fi network. You then control those appliances with the SmartThings iPhone app. But SmartThings is more than just things; it’s a platform, one that Hawkinson believes should be as open as possible,” wrote Lauren Goode, the creator of SmartThings.
Samsung realized the importance of open platform that the startup offers and it is one of the reasons why Samsung went after it. An open platform evolves more rapidly than other platforms because it lets everyone develop apps for their use, like Android.
“We want to build a completely open platform,” said Hawkinson, who seems happy after the deal struck between both companies.
The deal is good for SmartThings too as it is now competing with even bigger players like Google and Apple.
Google acquired a similar startup called Nest earlier this year for $3.2 billion.