Internet of Bling: Samsung Buys SmartThings for $200 Million
Samsung has bought SmartThings, the startup that makes smart-home controllers. While the companies did not disclose the price, sources said the South Korean consumer electronics giant paid about $200 million.
SmartThings will continue to be run by CEO and founder Alex Hawkinson and operate independently, Samsung said. But most of its operations — which now include 55 employees in Washington, D.C., and also offices in San Francisco and Minnesota — will be moved to Palo Alto, Calif., to become part of Samsung’s Open Innovation Center (OIC) there.
That unit, which is run by former Google and AOL exec David Eun, is focused on software and services innovation. As an example, the accelerator recently helped launch an app called Terrain, which “offers users a list of cards that provide shortcuts to information, content, social network feeds, frequently accessed information and settings on the device.”
In an interview earlier today, Hawkinson said that the sale to Samsung would help accelerate its efforts. “I think at a high level, it has always been our vision to go really big,” he said, pointing out Samsung’s massive global footprint and range of consumer appliances, as well as access to retail channels. “It’s just scale and reach all around the world — imagine reaching hundreds of millions of consumers and many more developers.”
Like Oculus VR, which recently sold to Facebook for $2 billion, SmartThings — which is actually owned by a company called Physical Graph Corp. — started as a Kickstarter project in 2012. It has since raised just over $15 million in funding, with investors that include Greylock Partners, Highland Capital and First Round Capital, among others.
TechCrunch had first reported about the possibility of a purchase several weeks ago, but it was not yet completed.
The deal is part of a larger landscape in the home automation space, which has seen a number of significant transactions, most notably Google’s acquisition of Nest earlier this year for $3.2 billion. SmartThings — which debuted its developer platform and products at our D: All Things Digital conference (see below) — has focused on doing things like connecting locks, lights and other home devices to mobile apps.
As Lauren Goode wrote at the time: “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.”
An open platform lets others create new apps that would work within the SmartThings system, a key differentiator, said Hawkinson.
Open is also what attracted Samsung, said Eun. “Samsung has been committed to smart homes and connected devices and has tried to paint this vision for a while,” he said. “But since consumers have lots of different devices, the trend is really toward open, and our approach is to be open and protocol agnostic.”
It’s all part of the Internet of Things meme that has been the focus of makers of connected devices in the physical world that are operated by smartphones and tablets. When Walt Mossberg reviewed SmartThings in January, he noted the larger idea:
“The broad idea behind these buzzwords is that a whole constellation of inanimate objects is being designed with built-in wireless connectivity, so that they can be monitored, controlled and linked over the Internet via a mobile app. And many of these sensors and connected objects can be installed in the home without changing wiring or hiring a professional.”
Hawkinson said that SmartThings sales had been growing, supporting more than 1,000 devices and noting that 8,000 apps had been created for the platform by 5,000 developers.
Samsung is obviously a big player in the mobile arena and has sought to expand the uses for its devices, which is why it needed to purchase a mature company in the space. Its smartphone business has been a leader, but it has recently experienced some setbacks with declining sales. Adding more features that make the phone indispensable to users is a key initiative for the company.
It has also been pushing its own Smart Home effort, linking to its panoply of home appliances such as refrigerators and washing machines, with a operating system called Tizen. But the open-source effort has not gotten as much uptake as SmartThings.
Right now, both Eun and Hawkinson said that there were a myriad of partnership opportunities among the various Samsung efforts like Tizen with SmartThings.
“We want to build a completely open platform,” said Hawkinson, about the increase in competition in the space. “Everything needs to be connected with tech that just works … I love all these efforts.”
It’s also a nice exit for SmartThings, which is now competing with much larger players like Google and even Apple.
If you want to get a better idea of what SmartThings does, here’s a video of Hawkinson demoing his wares at D11 in 2013:
And here’s his blog post on the sale:
SmartThings, Samsung, and the Open Platform
Today is a big day for SmartThings. I’m excited to announce that SmartThings has been acquired by Samsung and will be run as an independent company within Samsung’s Open Innovation Center group.
It has always been our goal to create a totally open smart home Platform that brings together third-party developers, device makers, and consumers. We’re thrilled that Samsung fully supports this vision.
We will continue to run SmartThings the way we always have: By embracing our community of customers, developers, and device makers and championing the creation of the leading open Platform for the smart home. Our growing team will remain fully intact and will relocate to a new headquarters in Palo Alto, CA. In short: SmartThings will remain SmartThings.
We believe that there is an enormous opportunity to leverage Samsung’s global scale to help us realize our long-term vision. While we will remain operationally independent, joining forces with Samsung will enable us to expand so we can support all of the leading smartphone vendors, devices, and applications; expand our base of developers and enhance the tools and programs that they rely on; and help many more people around the world to easily control and monitor their homes using SmartThings.
We’re tremendously excited about the possibilities ahead, and owe a heartfelt thank you to the people who have helped us get here: our amazing customers and supporters. To all of our earliest Kickstarter backers who believed in our vision; to our incredible investors and advisors, to our partners who have helped us to reach the world, to our community of developers whose contributions continue to propel the open Platform, to our all of our customers whose feedback, encouragement, and stories have driven us; and to our wonderful and growing team whose tireless work has helped propel us to where we are today: We cannot thank you enough.