It went from a $1.2 million Kickstarter smash hit to a $200 million acquisition by a corporate South Korean electronics giant, all in only two short years. If the rumors swirling about SmartThings today are true, this could be the first line of the scrappy Washington, D.C. startup’s riches to riches story.
According to TechCrunch, Samsung is looking to snatch up SmartThings for around $200 million. If the rumored acquisition goes through, it could help Samsung play some serious catch up in the Internet of Things (IoT) home-automation market, which Google has a pretty big lead in after buying Nest for $3.2 billion back in January. Apple has also entered the smart home game, too, with the introduction of its HomeKit platform for developers.
Related: This Tech Startup Wants to Revolutionize Your Home
We reached out to Samsung and SmartThings to confirm the rumored acquisition but spokespeople from both companies declined to comment.
But if true, it makes sense. SmartThings allows users to monitor, automate and control hundreds of connected home devices, like appliances, light switches, coffee pots and door locks with its $99 Hub hardware system and smartphone app (zero monthly fees). By teaming up, SmartThings can ride Samsung’s reported multibillion dollar marketing budget gravy train, ideally right into Nest’s market share.
For Samsung, still smarting from weak smartphone sales, picking up an established smart home player could provide the juice it needs to successfully charge into the trendy, and more importantly profitable, IoT niche.
Related: Meet the Man Leading the Connected-Home Revolution
Did we see this coming? Not exactly. However, we did predict last December that SmartThings was a hot startup to watch this year. On top of the Kickstarter campaign, the 44-person company has raised $3 million in seed funding and $12.5 million in a Series A round. Plus, it also inked a promising partnership with If This Then That, a service that allows users tie web apps like Evernote, Facebook and Dropbox together in a single "Recipe."
SmartThings CEO and founder Alex Hawkinson envisions apps for "literally everything" being connected to SmartThings systems in the future, even our pets. (Hopefully he doesn’t think kids are things, too.)
Related: 4 Hot Tech Startups to Watch in 2014
Kim Lachance Shandrow
Kim Lachance Shandrow is the former West Coast editor at Entrepreneur.com. Previously, she was a commerce columnist at Los Angeles CityBeat, a news producer at MSNBC and KNBC in Los Angeles and a frequent contributo...
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