Google has acquired Nest Labs, the company founded by Apple iPod creator Tony Fadell, for $3.2 billion. The smart-home startup makes an innovative digital thermostat, as well as a smoke detector.

Nest had been close to completing a funding round of upward of $150 million that would have valued it at more than $2 billion, Re/code reported earlier this month. That round never closed, because Google swept in with its huge offer. Sources familiar with details of the acquisition said that Google was the only serious bidder and Apple was not in the mix.

Google said the acquisition, which is subject to regulatory approval, was all cash and that the company would continue to operate under its own brand.

Fadell, a well-respected figure who co-founded Nest along with former Apple software exec Matt Rogers, said in a statement that, with Google’s 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.” Meanwhile, Google CEO Larry Page complimented the company’s team and the fact that it’s “already delivering amazing products you can buy right now.”

Google Ventures, the venture capital firm that’s fully funded by Google, had been one of the main backers of Nest, along with Shasta Ventures and Kleiner Perkins.

Nest, which was less than four years old, had quickly become one of the biggest brands in the emerging smart-home space. Its Nest Thermostat sells for $249 and its Protect smoke and carbon monoxide detector costs $129.

Here’s Fadell’s blog post about the deal and also an interview with him that Kara Swisher and I did right after it was announced.

In it, Fadell noted: “The whole goal is not to be totally independent — not just they just funnel us money — this is about something much bigger.”




13 comments
Res08hao
Res08hao

Today it's thermostats but later it will be security systems, lighting control, maybe some kitchen/cooking stuff, perhaps some kind of tracker for children/pets.

Phil Stubbington
Phil Stubbington

Crazy.  Here in the UK we have thermostatic valves on radiators, $16 each.  There's no sense in the valuation.

richie
richie

disappointed by this, wanted to see Nest grow independently without any influence from others. Hope they keep their word on their privacy policy.

DRH
DRH

Phew, I came close to being a Nest customer, thank god I held off.

hmurchison
hmurchison

Gooooooooooooooooogle......is watching you. 

drfisheye
drfisheye

Great. Ads on my smoke detector.

cryptochrome
cryptochrome

Awesome. So we soon get Nexus thermostats.

jsmithepa
jsmithepa

@Phil Stubbington Is a game "First Floor" investors play well. Hype up the valuation, get their 120% return, a couple of days, that's all they need. What happens to the company long term or whether it makes any money unimportant.


$250 for a thermostat? If it was THAT smart it would interface with my iPhone's alarm. My alarm set for 7 a.m. it knows to turn on the furnace 15 minutes before that. Simple. Nope, it doesn't do that. 

BayportBob
BayportBob

@Phil Stubbington i agree with you.  3.2billion is a lot of money to pay for home automation that looks cool, has neat software, but not much market share.  where's the beef?!

BayportBob
BayportBob

@junesix the article says that the funding never closed because of the Google buyout.  So........... why?

vb24
vb24

@drfisheyeTotally...now they're going to be able to track me when I'm away from my browser/computer/phone/iPad...ugh.

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