Suddenly, A Startup That Makes Thermostats Is Worth $800 Million

Nest Thermostat

In late 2011, a company called Nest Labs launched a product the tech world couldn’t stop talking about. But the product isn’t something that normally gets people excited.

Nest is perfecting the thermostat. And it’s been such a big hit, investors have decided to pour a boatload of money into the company. According to GigaOm’s Katie Fehrenbacher, Venrock, Google Ventures and others have given Nest $80 million at an $800 million post-money valuation. Fehrenbacher says Nest is shipping between 40,000 and 50,000 thermostats per month. A good number of those items are being shipped to Europe, and Nest’s devices are sold in Lowe’s, Best Buy, and on Apple’s website. It retails for $250.

Nest is a smart thermostat that learns when you wake up, when you go to sleep, and what temperature you like the room during the day. Each time you twist the dial, it remembers and adjusts itself accordingly. The temperature can also be adjusted from a smart phone app. Nest was built and designed by the same man who built Apple’s iPod, Tony Fadell.

Is it all it’s cracked up to be? A lot of gadget reviewers say yes. From Wired’s review of the second-generation Nest, which was released a few months ago:

Did it live up to the hype?

Oh, did it ever. First, installation was incredibly easy and within just a few minutes of taking it from the box, it was controlling our heat. Second, it looks really cool. It’s a slim, unobtrusive dial that’s been trimmed down a bit from the first generation. It glows red when it’s heating, blue when it’s cooling, and has a cute little leaf that appears to let you know you’re using it in a way that conserves energy, or empties your wallet.

…What I loved most, though, is the ability to adjust the temperature from anywhere. If I turn up the heat and then forget to kick it back down, all I have to do is pull out my phone and I can change the temperature. I can also turn up the heat from my toasty warm bed if I’m up early so I don’t have to freeze first thing in the morning.

Not sure how a thermostat company could be worth so much money? Watch the video demonstration of Nest, below: