Samsung Buys Startup SmartThings to Move Into Smart Homes

Samsung Electronics Co. (005930), which is competing with Google Inc. and Apple Inc. to gain a foothold in home automation, is acquiring SmartThings, a startup that makes makes mobile applications to remotely control devices in houses.

Terms of the deal weren’t disclosed, with technology blog Recode reporting the price as $200 million. David Eun, head of Samsung’s Open Innovation Center, said that while the South Korean company has a tradition of developing technology internally, his group in Silicon Valley would be stepping up its acquisitions.

“We have been looking for companies across a lot of different spaces that have a similar vision as the Samsung approach,” he said in a phone interview.

SmartThings brings to Samsung a company with an expanding base of developers, Eun said. SmartThings doesn’t make any devices itself and instead provides software that other companies can use to make devices speak to each other. For instance, house keys that will buzz a smartphone if a person has left the house without them, or a living room light that will brighten or dim if a person is in the room.

Eun declined to comment on how much Samsung paid for SmartThings.

Alex Hawkinson, the founder and chief executive officer of SmartThings, said in an interview that the company has been speaking with Samsung for about two months. He decided to do a deal because of Samsung’s global scale, and the opportunity to be closely integrated on the Samsung smartphones.

Photographer: Michael Nagle/Bloomberg

SmartThings, founded in 2012, is run by Chief Executive Officer Alex Hawkinson. Close

SmartThings, founded in 2012, is run by Chief Executive Officer Alex Hawkinson.

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Photographer: Michael Nagle/Bloomberg

SmartThings, founded in 2012, is run by Chief Executive Officer Alex Hawkinson.

Independent Business

“In a nutshell it’s all about scale,” he said.

SmartThings said in a blog post yesterday that it would operate as an independent business within Samsung’s Open Innovation Center and would relocate to a new headquarters in Palo Alto, California. Joining forces with Samsung will enable SmartThings to support leading smartphone vendors, devices, and applications, according to the blog post.

The deal underscores how larger technology companies are interested in the so-called Internet of things, which includes Web-enabled home appliances and centrally linked industrial equipment. Google earlier this year purchased smart thermostat maker Nest Labs Inc. for $3.2 billion. Apple in June showed HomeKit, a set of tools for developers to make iPhones work with so-called smart homes by controlling things like a light bulb or door lock with a smartphone.

SmartThings, founded in 2012, raised funding through crowd-funding site Kickstarter and later got financing from venture capital firms including Greylock Partners, the company said on its site.

Eun said connected homes would become much more mainstream and global in the years ahead. “This is not science fiction. This is here today,” he said.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark, Brendan Scott

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