SmartThings is Acquired by Samsung

A great story of a successful startup, SmartThings is being acquired by Samsung.  Producing products that connect the home, SmartThings has a foothold in the elder care area. Specifically “Keep an eye on those you love from wherever you are” . The internet of things (IOT) is the next big thing.  SmartThings started as a Kickstarter campaign in 2012, then obtained $12.5million in funding in November 2013. Now with the development of a smart lineup of connected consumer devices to smart phones, they hit the payday with a price tag of about $200 million, according to Re/code (citing anonymous sources).

The global internet of things (IOT) market is expected to grow by more than $5 trillion over the next six years, according to IT research agency, International Data Corporation (IDC).   IDC went on to say that the Internet of Things market will hit $7.1 trillion by 2020.

Samsung Electronic Co, Ltd. of S. Korea announced today that it would acquire SmartThings. The company will continue to operate independently under founder and CEO Alex Hawkinson, and will become part of the Samsung Open Innovation Center (OIC) which is responsible  for bringing software and services innovation to Samsung Electronics.  SmartThings will move its headquarters from Washington, DC to Palo Alto, CA.

The competition on the IOT front also includes Google and Apple.  In January, Google announced it had entered into an agreement to acquire Nest Labs, a maker of connected smart home devices.  It is also rumored that Google will be contemplating home security camera maker, Dropcam.

Meanwhile, Apple is moving to gain a strong footing on the IOT market with the company introducing new home automation technology, its HomeKit network protocol, designed to allow people to control connected devices in their homes via apps.

SmartThings originated in 2012 as a successful campaign on Kickstarter, raising more than $1.2 million on a $250,000 goal.  The series-A funding in November 2013 of $12.5 million included investors: A-Grade, CrunchFund, First Round Capital, Greylock Partners, Highland Capital, Lerer Ventures, Max Levchin, Start Fund by Yuri Milner, SV Angels and David Tisch.  Computing the amount of funding that went into this startup and the supposed acquisition translates into an 800% return on the initial investment (8X) in less than 3 years.

Congratulations team SmartThings!