Samsung is in talks to buy SmartThings, a startup that lets you control everyday appliances like lights and garage doors over the internet, according to our sources.
We don’t know the price, but Alexia Tsotsis of TechCrunch, who was the first to report the news, says it could be about $US200 million.
We’ve also heard SmartThings has been in acquisition talks with other companies for some time now, but Samsung appears to be the closest to scooping up the startup.
SmartThings is one of the most prominent young companies in the budding “internet of things” space. But big guys like Cisco, Google, and Apple are all experimenting with ways to let people control the stuff in their homes over the internet. In January, Google bought Nest, the maker of smart thermostats and smoke detectors, for $US3.2 billion. In June, Nest bought Dropcam, a company that makes Wi-Fi cameras that can monitor your home 24/7, for $US555 million.
With so many giants working on the internet of things, it would make sense for a relatively small startup like SmartThings to sell to a big company like Samsung to give it a bigger cushion to step on the gas and start expanding. SmartThings raised $US12.5 in November in a round led by Greylock Partners and Highland Capital Partners. The startup first started gaining buzz when it launched a Kickstarter fund that ultimately raised $US1.2 million.
Samsung is in need of a new product category, so the SmartThings acquisition makes sense on that end too. Samsung’s profits are shrinking as it struggles to sell smartphones in the same volume it used to. The company has dabbled in smartwatches (it has launched five models since last October), but none of them have really resonated with consumers.
In an interview with Business Insider in June, SmartThings CEO Alex Hawkinson hinted that he’d be open to an acquisition, but only if he thought it was the right fit. SmartThings is an open platform that any device or app maker can build into, and Hawkinson sees that as one of the biggest benefits of the company.
“Never say never in business generally, but right now we have a lot of interest in the company, and we believe believe that just generally right now it’s best to stay independent because we find that the marketplace wants a truly open platform in this space,” Hawkinson said when asked about a potential acquisition in that June interview. “And if we were hypothetically approached about being acquired by one of the candidates you would think of, my concern would be would that close off the avenues of the true innovation that’s happening on the platform?”
A spokesperson for Samsung declined to comment. A spokesperson for SmartThings also declined to comment.