8 Startups Designing Smart Home Devices
Remember the days when the height of high-tech in the home was a 1980s device called The Clapper. Chant it with us, “Clap on. Clap off. The Clapper!” Now, of course, it seems so quaint. The Internet of Things—the inexorable push to connect all the devices in our lives from sprinkler systems to thermostats to kitchen ovens—is turning your house into a smart home.
Last month, we brought you a possible vision of the smart city in the future, picking through some of the most interesting startups as vetted by the bright minds at CB Insights. The data firm recently posted a similar market map of smart home technology, featuring about 60 IoT startups across a range of sectors.
We decided to build our own smart home from the above, choosing 8 startups making our lives more connected than ever. First, though, we’ll throw a few numbers at you to briefly sketch out the market, drawing again on data from CB Insights (we love you, too, Anand). Below you can see a snapshot of deals and investments over the last 4½ years, with 2017 projected to see the fewest dollars invested since 2013.
More interesting, though, is that there has been a perceptible shift from heavy investing in early stage to late stage, which suggests that perhaps we’re seeing an overall maturing of the industry. Further, during the 2015 deal-making frenzy, we wrote about an IoT company called Alarm.com that offered retail investors some direct exposure to this emerging tech. Providing a cloud-based platform for smart home automation, Alarm.com hit the public investing domain with a market cap of about $670 million. Today it’s market cap is about $1.8 billion, perhaps demonstrating that there is strong and sustainable demand for IoT.
Now, let’s take a look at the smart home of the future, with at least one company possibly ramping up for an IPO in the near term.
Don’t Forget to Lock Up
Let’s start at the beginning. In this case, the front door, where Orlando-based UniKey Technologies turns your smartphone into a key. That sort of innovation has earned the seven-year-old startup about $18 million from 15 investors, including a $5 million Venture round in June. The smart lock space is becoming increasingly competitive, as we noted earlier this year with our list of 10 home security startups. UniKey stands out among the crowd by enabling someone to open a lock by simple touch while carrying a smartphone or even a fob. It also offers development kits to partners like lock manufacturer Kwikset that can build their own products using UniKey’s technology.
UniKey also serves customers in commercial and automotive industries.
Cooking with Intelligence
Our next startup, June, is a San Francisco based IoT company entering the increasingly crowded food tech market. A smart appliance company, June has raised $29.5 million, mostly from a $22.5 million Series A last March to build a smart oven. All you have to do, according to the company promo material, is hit the “on” button and The Oven does the rest. It’s even used by Michelin-starred chefs.
It has a built-in camera to identify the food and determine the best way to cook it. An app even allows you to watch your frozen pizza heat up in real-time, which has to be better than watching the Iron Chef. The Oven auto updates and saves settings that work the best for a particular meal. The company says its dual convection fans cook food more evenly and 33 percent faster.
This is Cool
German company Tado is doing its part to fight climate change by automating the climate in your smart home. It has raised $56 million in disclosed funding to date, including a $23 million Series C last year. It produces a smart thermostat and a smart AC controller. The geo-aware smartphone app automatically detects when someone is at home or away, and adjusts the heating or AC accordingly.
It also keeps tabs on the weather and uses algorithms to optimize energy use, claiming a savings of up to 31 percent in energy costs. It’s been called the Nest of Europe.
One Ring to Watch Them All
No smart home compound should be without Ring’s rapidly growing product line of video-enabled doorbells, floodlights and security cameras that are connected to a smartphone. The five-year-old Santa Monica startup is also rapidly raising money. It has taken in about $209 million, including a mega-round Series D of $109 million in January, led by Goldman Sachs. Amazon’s Alexa Fund, which targets smart home startups, has also backed the company in the past. Ring markets its camera systems as a new sort of neighborhood watch, and they were nice enough to give away their video doorbells to a neighborhood in Los Angeles which helped decrease burglaries by 50% (short video on that here). Here’s a look at their main products on offer:
TechCrunch reports the company hopes to go public by the end of the year.
Take a Bite Out of Cybercrime
It’s not only the people in your neighbor that you have to fear. Hackers are trying to break into your smart home, as well, and startup CUJO is trying to stop them. The company out of El Segundo offers an IoT firewall and scored $8.5 million in funding earlier this summer. Here’s a 60-second commercial telling you what they do. And here’s basically how it works: CUJO analyzes a device’s behaviors and identifies actions that fall outside the norms. Users then get alerts through the device’s app. This all happens through the cool looking device seen below:
In addition to making sure that your WiFi network is completely secure without incurring any bandwidth degradation, the device also has parental control functionality,
All of those concerns about safety might keep you up at night. That’s where Sleepace and its suite of products come in. Based in Shenzhen, China, the smart home startup has raised about $10.2 million. Its flagship product is RestOn, a non-wearable sleep monitor that tracks and analyzes your sleep patterns, delivering the data to a smartphone app.
The setup even includes a smart alarm that will wake you up during the lightest part of your sleep cycle within 30 minutes of your alarm. We can attest: If the Chinese know anything, it’s how to sleep anywhere at anytime.
Music to Our Ears
If you recognize only one company on this list, it’s probably Sonos, which makes wireless speakers for the smart home sound system. Founded 15 years ago in Santa Barbara, the company has raised $325 million in equity, as well as a $130 million secondary offering back in 2014 that allowed early investors to cash out. Its high-end wireless speakers let you rock out anywhere in your home to any streaming service or podcast. You can even go retro and listen to your vinyl collection. See the system in action:
While repeatedly the subject of rumors about IPOs and acquisitions (Google or Apple), the tight-lipped company appears to be happy to plot its own course. Its newest speakers reportedly come equipped with microphones though there is not an Alexa-like assistant available as yet.
Can You Hear Me Now?
Finally, in the category of “How long will this company last?” we have Nucleus, which produces a WiFi intercom system for the smart home of the future. Nobody told Nucleus that we already have an video-enabled intercom system. It’s called a smartphone. Still, the company has raised about $9 million, including a $5.6 million Series A last year led by Amazon’s Alexa Fund, for its tablet-looking intercom.
“Nucleus enables you to spend more quality time with your family” say the marketing folks at Nucleus. Of course there’s always the option of dragging your lazy butt off the couch and engaging with the various rooms in your giant McMansion house and the people that occupy them instead of gluing your face to yet another device.
The smart home of the future will be all about customization and convenience. Some of these devices will undoubtedly remain the domain of early adopters. High price points around products like June Oven will also keep much of the smart home tech out of the mainstream. The best bet right now is to follow the money, where companies like Tado offer hardware that provides a return on investment. Now that’s smart.
Despite what the pundits say, FAANG stocks (Facebook, Apple, Amazon, Netflix, Google) don't give you real exposure to AI. Read about 7 stocks that give you true pure-play exposure to AI in our guide to investing in AI healthcare companies, freely available to Nanalyze subscribers.