- Ecobee, a Toronto-based smart thermostat company, has raised $US47 million CAD (about $US36 million USD) in funding, bringing its Series C round to about $US127 million CAD total.
- Ecobee is backed by Amazon, and competes with Nest, Google’s smart home gadget subsidiary.
- Ecobee CEO Stuart Lombard says the plan isn’t to “outspend” Google, but rather to ride the wave in the Amazon Alexa and Apple HomeKit ecosystems to become the leading alternative.
The smart thermostat market is heating up. And yes, that pun is very much intended.
Ecobee, a smart thermostat company headquartered in Toronto, has raised another $US47 million CAD ($US36 million USD) – an extension to the round it first announced in March, bringing its Series C funding to about $US127 million CAD altogether. The round includes participation from the Amazon Alexa Fund.
At the same time, Ecobee has added three key execs, as it deepens it executive bench: Jackie Poriadjian-Asch as chief marketing and revenue officer, David Brennan as chief financial officer, and Scott Cleaver as chief operating officer. All told, Ecobee has around 350 employees today, with plans to keep hiring.
Ecobee founder and CEO Stuart Lombard says the company will use the funding to continue gaining ground on its primary rival: Nest, the smart home company that Google purchased for $US3.2 billion in 2014, spun out into an independent entity under the Alphabet umbrella in 2015, and reabsorbed into Google earlier this year.
“Our goal is to win with consumers. We’re not going to outspend Nest,” Lombard tells Business Insider. “We’re not going to out-Google Google, if you will.”
In other words, Lombard says, as Google’s Nest expands its home automation ambitions to include smart speakers, door locks, doorbell cameras, and security systems, Ecobee is taking a slower and steadier approach to growing its product lineup. Just recently, Ecobee launched the Switch+, a smart lightswitch, but is otherwise focused on thermostats.
“Every company needs to have a core and a focus,” says Lombard.
Lombard highlights Ecobee’s history of being on the forefront of the market. The original model of Ecobee was the first-ever consumer smart thermostat when it launched in 2010. More recently, the current-model Ecobee4 thermostat is a smart speaker on its own: You can use it to talk to the Amazon Alexa smart agent, just like an Amazon Echo.
On the subject of Amazon, Lombard says the Ecobee integration with Alexa is a “core part of our strategy.” Lots of customers use Alexa as the connective glue between their smart home devices, controlling their thermostats, lights, locks, and other appliances with their voices.
To that end, Lombard says Ecobee is also not trying to “out-Amazon Amazon” – as a startup, Ecobee doesn’t have the same resources as Amazon or Google to invent their own voice assistants, or try to get other other companies to standardize on integrating with its products.
Instead, given that people like using Amazon Alexa, Ecobee is betting big that it can be the most popular Alexa-powered thermostat. Similarly, Ecobee integrates with Apple HomeKit and Samsung SmartThings, both major rivals to the growing Google smart-home ecosystem. Ultimately, Ecobee is “not trying to support its own agenda,” but rather work to integrate well with everyone else’s.
While Lombard declined to go into specifics, he said that this strategy is working, with the startup’s business doubling every year for the last several years, as the rising popularity of smart home gear accelerates its growth rate. All of this, too, located in Toronto, well away from Silicon Valley, where most of its competitors raise funding and hire talent.
“I would put our innovation up against anything our competitors are doing,” says Lombard.
The new funding was led by Caisse de Dépôt et Placement du Québec (CDPQ),AGL Energy Ltd. and Business Development Bank of Canada. With this funding, Ecobee has raised over $US200 million CAD to date.
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