Google Inc’s Nest Labs is acquiring Dropcam Inc for US$555 million to boost its offerings for the connected home, it said.
The deal is to be in cash and subject to adjustments, Nest said in a statement on Friday. Dropcam makes in-home cameras that can be checked from a smartphone anywhere in the world, an offering that would broaden Nest’s product lineup into home security. Nest sells digital thermostats and smoke alarms that can also be checked and adjusted remotely from mobile gadgets.
“We care very deeply about helping people stay connected to their home, especially when they are not in their home,” Nest co-founder Matt Rogers said in an interview. “This is another offering that helps people get insights into their home.”
The purchase underlines how Palo Alto, California’s Nest, which Google bought for about US$3.2 billion earlier this year, is working to become a bigger player in connected devices for consumers.
The trend is part of a technology movement dubbed the “Internet of things,” where more gadgets and everyday items are connected to the Web, can deliver data and can be controlled by mobile devices.
The products gather data on consumer habits and usage. Privacy experts have questioned how Google, the world’s largest search engine, would use Nest’s data. Nest has said its information will remain separate from its parent company.
Dropcam’s data will also remain distinct from Google, Rogers said.
The acquisition adds to a growing list of purchases by Google this year as it looks beyond its own engineers for new capabilities. The Mountain View, California-based company disclosed at least five purchases last month and has announced at least three more this month. One of those was a US$500 million deal for Skybox Imaging Inc, which designs satellites that can help Google’s efforts around mapping and Internet access.
Nest, which was cofounded by former Apple Inc executive Tony Fadell, has run into product challenges recently.
In April, Nest said it was suspending sales of its smoke alarms after it determined the units could be switched off unintentionally. The products are now back on the market.
Dropcam, which was founded in 2009, lets users place cameras throughout a home for live viewing and recording.
The cameras also include options for night vision and two-way talking with built-in microphones. The San Francisco-based company’s backers include Accel Partners and Menlo Ventures.
Deal discussions began a little more than a month ago after Nest approached Dropcam, which was not looking to sell, Menlo Ventures managing director Mark Siegel said, adding that the talks were led by Fadell and Rogers.
Menlo Ventures invested about US$8 million in Dropcam in 2012, when the startup was valued at around US$50 million.
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