Startups

Google Is Buying Connected Device Company Nest For $3.2B In Cash

Comment

Image Credits:

Google is acquiring connected device company Nest for $3.2 billion. Google sent out an email to employees noting the acquisition today and later issued a press release.

In the release, Google noted that Nest has been offering its best-selling thermostat since 2011 and recently began offering the Protect smoke alarm, which networks with its other devices.

Nest Founders Tony Fadell and Matt Rogers will both join Google. Rogers was one of the first engineers on the iPhone team at Apple.

“They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe,” said Google CEO Larry Page in a statement. “We are excited to bring great experiences to more homes in more countries and fulfill their dreams!”

Fadell, who is known as the ‘father of the iPod’, said that they’re ‘thrilled to join Google.’ “With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.”

Nest will continue on as its ‘own brand identity’ and continue to be led by Fadell. The deal hasn’t closed yet as it has to meet regulatory approval.

Nest founders Fadell and Rogers also sent an emailed statement to TechCrunch about why Nest chose to go ahead with the acquisition.

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” Fadell says. “Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes.”

Fadell says that this decision was not made hastily. He says that at the 2011 TED conference — even before Nest had launched — he and Nest VP of business Erik Charlton had ‘huddled’ together in a corner with Google’s Brin to show him a video and early model of the Nest thermostat.

He instantly got what we were doing and so did the rest of the Google team when we showed them. In May 2011, Google Ventures led our Series B round of financing, and in 2012, Series C. Time and time again, Googlers have shown themselves to be incredibly like-minded, supportive and as big of dreamers as we are. I know that joining Google will be an easy transition because we’re partnering with a company that gets what we do and who we are at Nest – and wants us to stay that way.

We’ve been hearing rumors about Nest getting courted with large billion-dollar acquisition offers for months now, but a Google buy is a definite statement. The company has been fairly serious about its connected-device efforts for a while but hasn’t quite been able to get anything to gel. For instance, there have been some abortive attempts at connected devices like Android at Home in the past. But Nest already has a nice start in producing well-designed and connected home devices — something that Google should be able to build off of in the future.

Peter Nieh, a partner at Nest investor Lightspeed Venture Partners, has a post up about his early days working with Fadell at startup General Magic and what Nest has done since. He also shared a photo of the pair from 1992:

Tony-Peter-e1389593411451-1

Nieh says that though he was excited to work with Fadell again when it came time to invest in Nest, “…our excitement went off the charts when we met Matt Rogers, Tony’s co-founder, who was responsible at Apple for iPod software development and one of the first engineers on the original iPhone team.  We would have invested had they been looking to start a food truck.”

We reached out to Nieh for more thoughts, and he told TechCrunch that “Nest is a very special company — it’s a combination of an incredible team led by Tony and Matt, world-changing vision, and world-class execution.

“The acquisition by Google is just a milestone along the way as they continue their quest to change the world,” he added. “I can’t wait to see how they will continue to bring magic to all those unloved things in our homes.”

Google has previously been rumored to be investigating ramping up its own smart thermostat efforts, but this would likely supplant that — or the Nest team would take those projects over. Google also has an interesting project called PowerMeter, which monitors power consumption over time which could have some cool applications here.

The acquisition could also provide a patent boost of some sort for Google. In December, Nest said that it had 100 patents granted, with 200 more on file with the U.S. Patent Office and another 200 ready to file. Nest has been the target of some fairly high-profile patent suits and threats from legacy manufacturers like Honeywell over its thermostat and BRK over its Protect smoke detector. Google will likely offer shelter from further suits with its wide range of patents across a variety of technology arenas.

As far as how much autonomy Fadell will have to execute on his vision of what Nest can be, it doesn’t make a lot of sense for Google to derail a business that — by most counts — was fairly successful already and had been garnering praise from consumers over design. It could help with infrastructure problems that have caused failed firmware upgrades, which recently prompted complaints.

There’s also bound to be an immediate and visceral reaction to the access that Google will now have to information about when you’re home, which rooms you’re in and more. Which is why Nest also issued a Q&A about what will happen to users now that Google owns their thermostats and smoke detectors:

Will Nest continue to support iOS so I can have the Nest app on my iPhone or iPad?

Yes, absolutely. We’ll continue supporting iOS, Android and modern web browsers so you can check in on your home and control the temperature from wherever you are.

Will Nest and Google products work with each other?

Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.

What will happen to the Nest warranties on products?

No change there – we stand behind our products like we always have.

Will I still be able to find Nest products at my local retailer?

You bet. We intend to continue selling through the same partners in the US, Canada and the UK.

Will Nest customer data be shared with Google?

Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.

That answer is a bit vague, but the concerns over the recent revelations of enormous data gathering efforts on the part of the NSA should definitely cause some to worry. Whether Google chooses to share information voluntarily, it’s still a big target for those looking to hoover up vast swaths of data about its users, and that will only be more likely as time goes on, not less.

The deal is also set to make the startup’s early investors — Kleiner Perkins Caufield Byers and Shasta Ventures — a lot of money.

More TechCrunch

Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced on Tuesday that it closed a $150 million fundraise. Led by Paradigm, the platform also raised money from a16z…

Farcaster, a crypto-based social network, raised $150M with just 80K daily users

Microsoft announced on Tuesday during its annual Build conference that it’s bringing “Windows Volumetric Apps” to Meta Quest headsets. The partnership will allow Microsoft to bring Windows 365 and local…

Microsoft’s new ‘Volumetric Apps’ for Quest headsets extend Windows apps into the 3D space

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal action against the U.S. government, that means shaping up its…

As a US ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

7 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion

Zen Educate, an online marketplace that connects schools with teachers, has raised $37 million in a Series B round of funding. The raise comes amid a growing teacher shortage crisis…

Zen Educate raises $37M and acquires Aquinas Education as it tries to address the teacher shortage

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice